What to Expect from the Fed

I remember when Fed meetings used to be interesting:

The Federal Reserve is expected to give a nod to signs the U.S. recession is waning but will likely warn that the recovery will be slow and dampen any expectations it will soon start to raise interest rates.
The Fed’s policy-setting committee, which meets on Tuesday and Wednesday, is expected to hold its benchmark overnight rate in a range of zero to 0.25 percent. A statement on the decision is due about 2:15 p.m. EDT on Wednesday.
“The markets have begun pricing in a near-term increase in interest rates. That is extremely unlikely. The Fed is going to want to discourage that,” said former Fed Governor Lyle Gramley.
The Fed is likely to decide to let its $300 billion Treasury purchase program expire, as scheduled, in September. Fourteen out of 16 primary dealers polled by Reuters last week said they expect the Fed not to extend the controversial program.

Posted by Eddy Elfenbein on August 12th, 2009 at 9:22 am

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