Fed Sends Clear Sign On Raising Rates, But Says Hike Unlikely In April
The Federal Reserve moved a step closer toward ending its zero interest rate policy. In a statement released moments ago, the Fed dropped a pledge to be "patient" before raising rates. But, the Fed's Open Market Committee said, it is unlikely to raise rates in April.
"The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the Fed said in a statement. "This change in the forward guidance does not indicate that the Committee has decided on the timing of the initial increase in the target range."
Fed officials had long signaled that they would be patient before raising rates.
As the Wall Street Journal reports:
But with unemployment rate falling and inflation moving toward the Fed's 2 percent target, policymakers may have decided it was time to be less assuring about rates.
Rates, of course, are just one thing Fed policymakers have their eye on. As Jacob Goldstein of NPR's Planet Money team reported on today's Morning Edition, when the economy seems strong enough, the Fed will start pulling that money – approximately $3 trillion of it — out of the economy. He says:
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