Federal Reserve officials are signaling more confidence in the economy that moves them nearer to raising interest rates, and are stressing the liftoff is linked to data rather than dates to avoid unsettling markets.
Fed Vice Chairman Stanley Fischer said today the central bank was getting closer to replacing its vow to hold rates low for a “considerable time” with guidance that tighter monetary policy would hinge on the economy’s performance.
The Federal Open Market Committee is embarking on a critical phase in its seven-year battle with a financial crisis, a recession and a sub-par recovery. If the economy keeps improving, officials will need to signal to investors that they’ll raise the federal funds rate without sending bond yields higher and slowing growth.
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