Fed Watch: Weakening likely puts off QE tapering talk
Don’t look for any significant changes when Federal Reserve policymakers meet this week. If anything, they’re likely to sound more dovish than they did in March given recent data suggesting the labor market is weakening and key inflation gauges are running well below the Fed’s 2% target.
With neither economic forecasts nor a press conference on the docket, it’s likely Wednesday’s post-meeting statement will acknowledge some slowing in the economy and may avoid any discussion of a timetable for a possible pullback from the Fed’s $85 billion of monthly government and agency securities purchases. Conversation about the latter crept into the statement following the late March meeting, but since then, almost every economic metric—employment, manufacturing, business and consumer spending, even housing—has worsened somewhat; not enough to suggest a recession, but enough to allow policymakers to justify continuing aggressive monetary accommodation.