After misleading investors with a time line for tapering its unprecedented stimulus, the Federal Reserve now is stressing that any reduction in bond purchases will depend on the economic outlook -- and the message is sinking in.
Here’s what to look for when the Federal Open Market Committee releases its statement today at 2 p.m. after a two-day meeting in Washington. The panel will also provide new economic forecasts, and Federal Reserve Chairman Ben S. Bernanke will hold a news conference at 2:30 p.m.
Treasuries dropped, pushing 10-year note yields up for the third week this month, on speculation minutes of the Federal Reserve’s policy meeting indicated the bank may trim debt purchases by the end of the year.
Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, said he expects U.S. growth to pick up during the second half of the year as inflation without food and fuel costs reaches 2 percent in 2012.
John Canally, an economist at LPL Financial Corp., and Ward McCarthy, chief financial economist at Jefferies & Co., said investors are looking to the Federal Open Market Committee’s January meeting for policy makers to further develop their communications plans. They spoke after the Fed’s decision today to keep policy unchanged.