WASHINGTON (5/1/13)--The Federal Reserve's key monetary policymaking group is not expected to make any policy changes when its two-day meeting ends today.
The Federal Open Market Committee (FOMC) began meeting Tuesday and will issue its monetary policy statement early this afternoon.
Economists are expecting no changes, saying there is little sign that the FOMC would expand its quantitative easing policy any further at this time (The New York Times and Reuters April 30). At present, the Fed is buying back $85 billion a month in Treasury and mortgage-backed securities each month as part of the QE3 policy that it has said will continue until gains in employment are substantial.
The FOMC also has indicated it would keep short-term rates at near-zero levels--between 0% and 0.25%--until the unemployment rate fell to 6.5% or lower, if inflation forecasts were no more than 2.5%.
Currently the unemployment rate is 7.6%, and the inflation gauge rose 1.2% to below the 2% target, said the Times.
Eric S. Rosengren, president of the Federal Reserve Bank of Boston, noted that the Fed is seeing an impact from its policies, but that it is "pushing the interest-sensitive sector about as far as we're going to be able to push it at this time."
The recent increases in sales of homes and autos, as well as a rising stock market, indicate that the Fed's bond-buying policy is working, Fed Chairman Ben Bernanke said recently.
At the committee's last meeting on March 19-20, committee members debated when to begin winding down the program, with some indicating it could be done in mid-year and others saying by the end of 2013.
Watch for News Now coverage when the statement is released this afternoon.