Tuesday, January 3, 2012

Federal Reserve Will Release Benchmark Rate Forecasts

Federal Reserve officials will make their forecasts for the federal funds rate public at their next meeting (January 24-25), according the Federal Open Market Committee minutes released today. In a move to increase transparency and anchor expectations “participants decided to incorporate information about their projections of appropriate monetary policy” into their statements.

The minutes also reflected that “a number of members indicated that the current prospective economic conditions could well warrant additional policy accommodation.” The committee also decided that communication could provide a strong tool, noting that “any additional actions would be more effective if accompanied by enhanced communication about the FOMC’s longer-run economic goals and policy framework. quote

The minutes noted that the U.S economic activity “expanded moderately.” This marks an improvement from the previous statement. Despite the improvement, the Fed warned of an “apparent slowing in global growth” and noted that “strains in global financial markets continue to pose significant downside risks to the economic outlook.”

Read the minutes.

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