Fed to Regularly Forecast Interest-Rate Changes

Fed to regularly forecast interest-rate changesWASHINGTON (AP) - In a major shift, the Federal Reserve will start updating the public four times a year on how long it plans to keep short-term interest rates at record lows, according to minutes from its December policy meeting.

The first forecast will be included in the central bank's economic projections after its Jan. 24-25 meeting, the minutes said.

The change is the Fed's latest move to make its communication more open and explicit. It could help assure investors, companies and consumers that rates won't rise before a specific time. This might help lower long-term yields further - in effect providing a kind of stimulus.

The Fed has left its key short-term rate near zero for the past three years. In August, it that it plans to leave it there until at least mid-2013, unless the economy improves.

After its Dec. 13 meeting, the Fed issued a policy statement that portrayed the U.S. economy as improving slightly. The central bank declined to take any additional steps to boost growth.

In January, the Fed will release an interest rate forecast for the fourth quarter of 2012 and for the next few calendar years, the minutes show. It will update that forecast four times a year.

The minutes also suggest the Fed could be poised to launch a new step to invigorate the economy. Some members favored bolder action but said they wanted to wait until the more explicit communication policy was in place.

The plan to forecast interest rates follows a historic decision last year to have Fed Chairman Ben Bernanke hold news conferences four times a year. Bernanke has also done a number of interviews and sought other changes to make the Fed's decision-making process more transparent.

Increase your money and finance knowledge from home

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Forex for Beginners

Learn about trading currencies and foreign exchange transactions

View Course »

Add a Comment

*0 / 3000 Character Maximum

1 Comment

Filter by:

Fed to forecast rate changes???? Sounds like another step to the Occupants 5-year plan comrade!!!! That worked out well until the wall was pushed down by the dis satisfied peasants....

January 04 2012 at 8:48 AM Report abuse +1 rate up rate down Reply

Government perfers deflation over inflation but eventually one leads to the other and you experience twice the pain.
Higher interest rates would free up all the capital that banks and business have been sitting on since the bailouts.
None of the companys or banks that have reserves have any motivation to spend there monies when they are competing against free government money? Right now lenders are living on there credit card income because government has over regulated the industry as a overeation to being previously under regulated. Government needs to get its foot off the neck of business and the economy would turn around over night...Thanks BEN!

January 04 2012 at 12:29 AM Report abuse rate up rate down Reply

Hey dumb-dumb, it's time to move the interest rate up .25%!!!!!!

January 03 2012 at 3:27 PM Report abuse +1 rate up rate down Reply