Monday, September 21, 2009

Looking Ahead to the Fed

The Fed opens one of its two-day policy meetings tomorrow, and there is much anticipation for its report on Wednesday afternoon, when it will offer it assessment of the economy and announce any changes to monetary policy. They could very likely reinforce Fed chairman Ben Bernanke's opinion from last week that the recession is "likely over."

The Fed has already indicated that it would at least slow its purchase of Treasury bills. Its program of buying T-bills - it's bought $300 billion so far- is scheduled to end in October, and the consensus is that it won't be renewed. Getting out of that market would signal that the Fed has increasing confidence in the economy and the government.

One thing they're not expected to do is lift the Fed funds rate above its current state at zero to 0.25 percent. A Reuters poll last week showed economists expect the Fed to hold rates steady until as late as the third quarter of next year.

The report is officially issued at 2:15 on Wednesday afternoon. We'll keep you posted on what transpires.

No comments:

Post a Comment