The Federal Reserve will probably discard its 6.5 percent jobless rate threshold while adopting qualitative guidance for signaling when it will consider raising the benchmark interest rate, economists said in a survey.
The Federal Open Market Committee tomorrow will say that it will link policy to a range of economic indicators, according to 76 percent of 54 economists in a March 14-17 Bloomberg News survey. Twenty percent of the economists surveyed said the Fed will maintain the threshold it adopted in December 2012, while 6 percent said it will drop such guidance entirely.
The FOMC will probably succeed in updating guidance without prompting investors to expect an earlier increase in the main interest rate, said Michael Feroli, chief U.S. economist at New York-based JPMorgan Chase & Co. and a former researcher for the Fed Board in Washington. In December, 12 out of 17 FOMC participants projected the first rate increase in 2015.
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