The Federal Reserve, in some respects, didn’t change any of its policies in the meeting that ended yesterday. As expected, it shaved another $10 billion off its asset-purchasing plans, bringing the monthly total of its bond buying down to $55 billion starting in April.
One slight change, though, was that the Fed no longer says that it will consider raising interest rates once the unemployment rate reaches 6.5 percent, as Ben Bernanke claimed more than a year ago. Unemployment is now at 6.7 percent, and could officially drop to 6.5 percent as early as the first week of April, when the next set of figures is released.
The Fed has clearly decided that that is too soon, that this economy isn’t strong enough yet to raise interest rates. Indeed, according to today’s Fed announcement, most Fed officials don’t foresee an interest-rate hike until 2015.
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