WASHINGTON (3/20/13)--The Federal Reserve's monetary policymaking body will end its two-day March meeting today but is unlikely to change the Fed's $85 billion-a-month bond buying program or the near-zero targeted federal funds interest rates, according to economists surveyed before the meeting.
However, economists expect some tweaking in the wording of the policy statement because the economy has improved since the Federal Open Market Committee's (FOMC) Jan. 29-30 meeting, according to Business Insider (March 19).
The FOMC will delay the timing of the release of its after-meeting statement so it occurs closer to Fed Chairman Ben Bernanke's post-meeting press conference. Normally there is a 90-minute lag between the two events. Beginning today, the statement will be released at 2 p.m. EDT, followed by the press conference at 2:30 p.m. That means News Now's update this afternoon will be an hour later than usual.
Since the Jan. 29-30, the last time the FOMC met, the economy has seen improvement in labor market conditions. However, the federal government failed to avert sequestration and events in Europe could pose downside risks. Several economists said they expected some language tweaking in the statement due to the improvements in the labor market.
"The net effect is likely to be no change in either the quantitative easing purchase pace or the forward guidance," said Michael Hanson, Bank of America Merrill Lynch senior U.S. economist (International Business Times March 19).
Currently the policy is for the Fed to buy $85 billion in bonds each month, and that is expected to continue until the labor market improves "substantially." Interest rates will remain at 0%-0.25% until unemployment drops to 6.5% or inflation increases to 2.5%.
Watch for News Now's updates on today's meeting.