WASHINGTON (7/30/13)--Fed policymakers meeting today and Wednesday are expected to stay the course on monetary policy, which means no change is expected in either the federal target funds rate or the Fed's quantitative easing (QE3) policy of buying bond assets (Bloomberg.com).
The Federal Open Market Committee (FOMC), the Federal Reserve's monetary policymaking body, probably will maintain its benchmark federal funds interest rate at 0.25% when it makes its statement on Wednesday, according to economists surveyed by Bloomberg. Economists also predict that the FOMC won't begin to reduce its $85 billion a month bond purchasing program, dubbed QE3, until September.
The Fed said after its last meeting that economic data--namely the unemployment rate and the inflation rate--will determine when it moves its forward guidance on interest or its asset purchases policy.
This week's meeting is the last FOMC meeting before September, the month many economists expect the Fed to announce it is tapering off the bond asset purchasing program.
Although no changes are predicted in this week's policy, the FOMC's commentary on the state of the economy could be significant, said Brian Gardner, senior vice president of Washington Research at Keefe, Bruyett & Woods. Any change in the committee's description of the economy may yield clues about when the tapering process will begin, he told MoneyMorning.com. (July 29).