Waiting for Nothing?

The prime event to keep our eyes on this week is the two-day meeting of the Federal Reserve Board, which takes place Tuesday and Wednesday. And maybe the best thing that could emerge from that meeting is if Fed chairman Ben Bernanke comes out on Wednesday and says the Fed is not doing anything new.

There has been some speculation that the Fed will act to tamp down mortgage rates. A brief bit of optimism in the housing market has been dampened lately by rising interest rates, cutting off the growth in home sales. Concurrently, long-term interest rates have been rising, and some feel that the Fed would do well to take actions to reduce those interest rates, which may hinder the economic recovery down the road.

The Fed will review its options to do something about interest rates, but in the end, it is likely to keep things right where they are. The Fed Funds rate, the rate at which banks lend each other short-term money, is already at zero, and the Fed could think that keeping that rate right there is all the interest-rate fighting it needs to do.

That will mean that some of the smartest, most knowledgeable people in the nation spent two days looking at the economy and came out with the conclusion that we're on the right track. There's something to be said for that.