Fed likely to hold steady on rates and bond buys
The Federal Reserve will have plenty to say about the economy Wednesday, when its two-day policy meeting ends with a statement, updated forecasts and Chairman Ben Bernanke's latest news conference. Whether all that information will signal any shift in the Fed's outlook or the prospect of further steps to boost the economy is far from clear. The central bank will likely repeat its plan to keep short-term interest rates at record lows through 2014. It may also signal that it won't likely launch any new program to lower longer-term rates unless the economy weakens. That would be a switch from three months ago, when Bernanke and his colleagues ended their January meeting with hints that they were edging closer to a third round of bond buying. The Fed's bond purchases have been intended to drive down long-term rates to encourage borrowing and spending. But since then, signs have suggested that the U.S. economy has strengthened. And the European debt crisis looks less dire than when the year began, though France's presidential race has muddled the outlook. Those developments make a further round of Fed bond buying less likely, many economists say. "This will be a wait-and-watch meeting," says David Jones, chief economist at DMJ Advisors. "Despite all the theatrics with a Bernanke press conference and new economic forecasts, I think we will get a very predictable outcome—no change in policy." Get the full story from The Associated Press here.
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