Federal Reserve Says No Rate Hikes Until At Least Late 2014 - Spokane, North Idaho News & Weather KHQ.com

Federal Reserve Says No Rate Hikes Until At Least Late 2014

MSNBC.COM - The U.S. Federal Reserve said Wednesday it will not raise interest rates until at least late 2014, even later than investors expected, in an effort to support a sluggish economic recovery.

Without making major shifts to its outlook for the economy, the central bank described the unemployment rate as still elevated and said it expects inflation to remain at levels consistent with stable prices.

"I think what they are seeing is that the rate of growth is not sufficient to bring down the unemployment rate," said Brian Dolan, chief strategist at Forex.com.

The Fed depicted business investment as having slowed, downgrading its assessment from the December meeting.

Economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014," the central bank said in a statement.

Richmond Fed President Jeffrey Lacker, an inflation hawk who rotated into a voting seat this year, dissented against the decision. He preferred to omit the description of the time period for ultra-low rates.

As part of an effort to provide more insight on its thinking to financial markets and the public, the Fed later on Wednesday will begin publishing individual policymakers' projections for the appropriate path of the benchmark federal funds rate. That release is scheduled for 2 p.m. ET.

If the Fed can convince financial markets it will be on hold longer than they had anticipated, long-term interest rates could drop as investors price in the new information.

"A significant contingent of the committee views this exercise not so much as a process improvement but more as an opportunity to ease again via the forward rate communications channel," Stephen Stanley, an economist at Pierpoint Securities, said ahead of the Fed's announcement.

There is also the possibility that officials will announce an explicit inflation target, perhaps a hard marker of 2 percent or a range of 2 percent or a bit below. The Fed has been debating a statement on its long-run goals, but whether one will be released on Wednesday is unclear.

While forecasters expect the U.S. economy grew at a 3 percent annual rate in the last three months of 2011, they look for growth of just around 2 percent this year.

Fed officials appear likely to bide their time in determining whether more monetary stimulus is needed. Many economists expect they will eventually decide on another spurt of Fed bond buying - probably one focused on mortgage debt.

In response to the deepest recession in generations, the Fed slashed the overnight federal funds rate to near zero in December 2008. It has also more than tripled the size of its balance sheet to around $2.9 trillion through two separate bond purchase programs.

The policy is credited with having prevented an even more devastating downturn, but it has been insufficient to bring unemployment down to levels considered normal during good economic times.

In December, the U.S. jobless rate stood at 8.5 percent, and some 13 million Americans were still actively looking for work but could not find it.

Analysts said the Fed's shift in communications will put an even greater emphasis on a post-meeting news conference by Fed Chairman Ben Bernanke set for 2:15 p.m. ET.

"The chairman is likely to remain non-committal to any additional policy easing, but he is likely to reinforce the Fed's commitment to 'review the size and composition of its securities holdings' and be 'prepared to adjust those holdings as appropriate,'" said Millan Mulraine, senior macro strategist at TD Securities.

  • Most Popular StoriesMost Popular StoriesMore>>

  • Family tries euthanizing cat after he walked 12 miles to return home

    Family tries euthanizing cat after he walked 12 miles to return home

    Thursday, April 19 2018 1:23 AM EDT2018-04-19 05:23:12 GMT
    @a.cat.named.toby@a.cat.named.toby
    @a.cat.named.toby@a.cat.named.toby

    RALEIGH, North Carolina - A North Carolina family gave their cat away and then tried to euthanize him after he walked 12 miles back to his home. According to the Society for the Prevention of Cruelty to Animals of Wake County, North Carolina, Toby the cat made the long trek back to his family after they tried to give him away. When he returned, they took him to a shelter to put him down. The shelter called the SPCA to ask if they would help 

    >>

    RALEIGH, North Carolina - A North Carolina family gave their cat away and then tried to euthanize him after he walked 12 miles back to his home. According to the Society for the Prevention of Cruelty to Animals of Wake County, North Carolina, Toby the cat made the long trek back to his family after they tried to give him away. When he returned, they took him to a shelter to put him down. The shelter called the SPCA to ask if they would help 

    >>
  • Toddler shoots pregnant mom outside Indiana thrift store

    Toddler shoots pregnant mom outside Indiana thrift store

    Wednesday, April 18 2018 4:40 PM EDT2018-04-18 20:40:25 GMT

    MERRILVILLE, Indiana - An Indiana woman is in critical but stable condition after her 3-year-old daughter accidentally shot her with a gun her father left in the car. Police in Merrillville say two small children were waiting in the car with their mother while their father shopped inside a thrift store when the shooting happened Tuesday afternoon.

    >>

    MERRILVILLE, Indiana - An Indiana woman is in critical but stable condition after her 3-year-old daughter accidentally shot her with a gun her father left in the car. Police in Merrillville say two small children were waiting in the car with their mother while their father shopped inside a thrift store when the shooting happened Tuesday afternoon.

    >>
  • Community comes together at candlelight vigil for Medical Lake students

    Community comes together at candlelight vigil for Medical Lake students

    Thursday, April 19 2018 2:14 AM EDT2018-04-19 06:14:13 GMT

    MEDICAL LAKE, Wash. - It was an incredibly emotional night in Medical Lake as a candlelight vigil was held in this community that continues to heal. The Medical Lake family gathered tonight to be with each other and be there for each other.  On Saturday, 17-year-old Journey Tueller was killed, and three other students, Laci Sica, Savannah Sutton and Hailey Gross were injured in a crash as they were on their way to catch a team bus. 

    >>

    MEDICAL LAKE, Wash. - It was an incredibly emotional night in Medical Lake as a candlelight vigil was held in this community that continues to heal. The Medical Lake family gathered tonight to be with each other and be there for each other.  On Saturday, 17-year-old Journey Tueller was killed, and three other students, Laci Sica, Savannah Sutton and Hailey Gross were injured in a crash as they were on their way to catch a team bus. 

    >>
HD DOPPLER 6i
/