WASHINGTON — When the Federal Reserve meets this week, it's likely to affirm a message it intends to help lift the economy: that consumers and businesses will be able to borrow cheaply well into the future — even after unemployment has dropped sharply.
Last month, the Fed signaled for the first time that it will tie its policies to specific economic barometers. It said that as long as the inflation outlook is mild, it could keep short-term rates near zero until unemployment dips below 6.5 percent from the current 7.8 percent.
That could take until the end of 2015, the Fed predicted last month.
The Fed's guidance was designed to give consumers, companies and investors a clearer sense of when super-low borrowing costs might start to rise. Though some key sectors of the economy are improving, analysts think the Fed still feels more time is needed for low rates to spur borrowing, spending and economic growth.
One reason is that many Americans remain anxious about the budget impasse in Washington.
"The Fed is dealing with a lot of uncertainty right now, with all the decisions still to be made on federal budget policy," said Diane Swonk, chief economist at Mesirow Financial, who expects the Fed to make no changes in its support programs when its two-day policy meeting ends Wednesday.
At its December meeting, the Fed said it would keep spending $85 billion a month on bond purchases to keep long-term borrowing costs down. It will continue its bond purchases until the job market improved "substantially."
- Salt Lake City named among top 10 downtown...
- Dave Ramsey says: Make pocket money part of...
- Balancing act: Readers offer tips for...
- 20 ways to make yourself more likable at work
- US running out of room to store oil; price...
- Lehi supplement firm launches research lab
- Michelle Singletary: Compassion beyond the...
- University Place construction timeline released
- Survey: US businesses add 212K jobs in... 3
- Monarchs say Fairpark deal is dead,... 3
- Salt Lake City named among top 10... 3
- University Place construction timeline... 2
- Lehi supplement firm launches research lab 2
- Nebraska looking at ways to lure... 1
- Automakers vow not to give up on... 1
- Michelle Singletary: Compassion beyond... 1