Here’s what to look for when the Federal Open Market Committee releases its policy statement and new economic projections at 2 p.m. today in Washington and Federal Reserve Chair Janet Yellen holds a press conference at 2:30 p.m.
— Still “considerable”? It’s shaping up as a close call. Thirty-two of 60 economists in a Bloomberg survey said the FOMC will stick to its pledge to keep its benchmark interest rate near zero for a “considerable time” after it finishes bond purchases.
Cutting that language could spook investors, said Lindsey Piegza, chief economist at Sterne Agee & Leach Inc. in Chicago. “One of the biggest concerns with removing that is that the markets will read it as a hawkish tilt,” she said.
The committee doesn’t need to drop the phrase immediately, because the end of bond purchases probably won’t come for at least another month. The FOMC today will probably announce that monthly purchases will be reduced by another $10 billion, to $15 billion, Maury Harris, chief economist at UBS Investment Bank in Stamford, Connecticut, said in a note to clients. Most analysts expect October will be the last month of the program, putting the FOMC on track to announce an end to it at the Oct. 28-29 meeting.