Jan. 29, 2013 – NAFCU economists believe it is unlikely any major policy shifts will be announced by the Federal Open Market Committee following a two-day meeting that concludes Wednesday, its first policy setting session for 2013.
In late 2012, the FOMC announced new bond-buying programs and set specific targets for unemployment and inflation as they relate to tightening monetary policy. The FOMC said Dec. 12 that it would maintain the current federal funds rate target range of 0 to 0.25 percent as long as unemployment remains above 6.5 percent; inflation stays within a half a percentage point above the panel’s 2 percent long-run goal over the next one or two years; and longer-term inflation expectations continue to be “well anchored.”
NAFCU Research Associate Doug Christman noted that recent economic indicators have been mostly “more of the same.” The Fed can use recent data reports to justify the continuation of current policy while it gauges the impact of those actions, he said.
While the FOMC is unlikely to make any new policy announcements Wednesday, it is expected to unveil an updated economic forecast.