For Fed, delivering a message on policy path is new focus

While recent and brisk improvements in the labor market have raised the chance that policymakers might taper at their meeting next week, most economists expect the Fed to keep its $85 billion-a-month bond-buying program in place for a bit longer. But the Fed is expected to grapple with how much to telegraph about any plan to wind down its purchases, and to reinforce its commitment to keeping interest rates near zero even as it preps markets for the long road back to policy normalcy. “What should be on the table is, Are there adjustments to our forward guidance that would reinforce the overall stance of policy that the Fed is trying to communicate?” the president of the Atlanta Fed, Dennis Lockhart, who is often seen as a bellwether for overall U.S. monetary policy, told reporters last week. To pull the U.S. economy from its worst downturn in decades, the Fed has kept short-term rates near zero.


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