Today at 1:15 PM CST the Federal Open Market Committee (http://www.federalreserve.gov/newsevents/default.htm) will release it’s statement concerning the state of the economy, and most importantly, the board’s vote on short-term interest rates.
While most expect no change in the Fed’s current zero interest rate policy, including ourselves, what investors will be watching for are clues surrounding the future of interest rate policy. Greenspan, during his tenure adopted a much more visible and telegraphed Fed. Bernanke has not only continued with Greenspan’s more public and transparent fed, but taken it a step further with invitations of multiple media outlets and long public interviews.
Under non stressed circumstances, we expect the FOMC, and the Fed to give investors a head nod in advance that rates will be moving up in the future, several meetings before the actual announcement.
We do not expect rates to be changed today, but we are very interested in the language of the FEDs release and will have our eyes peeled for a change in language that would be a possible head nod for future rate increases.
Have a Good Day.