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Friday, March 29, 2024
HomeNewsEconomyFOMC Changing What Is ‘A Consider Period’ Of Time To Hold Interest Rates Down?

FOMC Changing What Is ‘A Consider Period’ Of Time To Hold Interest Rates Down?

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The Federal Reserve (Photo: REUTERS)

The policy-setting Federal Open Markets Committee (FOMC) will decide next week whether interest rates will remain low for “a considerable period” or not.

The Fed committee will meet on Tuesday and Wednesday next week an announcement is scheduled for 2 P.M. ET Wednesday. Fed Chair Janet Yellen will hold a press conference following the announcement.

Markets and investors expect the Fed to finally address the question of when they will decide to hike interest rates, as they may potentially change the language of its statement by eliminating the phrase “a considerable period.” The phrase was added earlier this year to vaguely describe the duration of time interest rates would stay low — largely because they simply didn’t know — after the Fed ended its monthly bond-buying program.

The Fed decided to end its bond-buying program known as quantitative in October, and most analysts have interpreted the “considerable period” to end in mid-2015. Fed policy-makers have sent signals to the markets that the phrase could be replaced with an even more vague single-term — “patience.”

If the Fed’s language sounds as if they aren’t even sure what is the correct course of action to take, at least they will have some fresh new economic data to draw from this week.

Several economic indicators are also scheduled to be released next week, including a report on industrial production on Monday, data from the National Association of Realtors on November housing starts on Tuesday; and the Consumer Price Index (CPI) from the Commerce Department on Wednesday.

The CPI, specifically, will be closely watched and scrutinized by economists and traders alike, as the Fed’s 2 to 3 percent inflation mark has become a key indicator for when the central bank might raise interest rates.

Written by

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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