Fed Watch: It's still Ben's world
Despite public reluctance of a minority of members to continue expanding the Fed’s balance sheet at the current pace of $85 billion a month, don’t look for any changes at next week’s Federal Open Market Committee meeting. Fed Chairman Ben Bernanke has a firm hold on the doves who represent the majority of the policy-setting committee’s voting members, and his recent testimony before Congress made clear he sees no need for easing off anytime soon.
Fed funds futures contracts also suggest the benchmark rate will remain effectively at zero until 2015, so no change there, either. About the only potential difference from late January’s meeting will be a likely moderate upgrade in the quarterly economic projections accompanying Wednesday’s meeting—not enough, of course, to merit any policy changes but enough to reflect improvements in housing, business investment and employment since its last forecast.