Evolution of the US Federal Reserve Language

“Extended period.” 6.5 percent unemployment. “Considerable time.”

Every six weeks or so, after the Federal Reserve holds a policy meeting, it issues a statement containing guidance to the financial world on when it might raise interest rates.

It’s a moment of great expectation for investors and economists.

The language the Fed has used has steadily evolved since it cut its benchmark short-term rate to a record low in 2008. On Wednesday, after the Fed’s latest meeting ends, it may or may not retain its most recent guidance: That it expects to keep its short-term rate near zero for a “considerable time” after it stops buying Treasurys and mortgage bonds. Those purchases are set to end in November.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza