The Federal Reserve’s two-day meeting next week will mark the first at which members of the policy-setting Federal Open Market Committee offer their individual forecasts for the future path of the benchmark interest rate the central bank controls.
Two blank charts released Friday afternoon will show projections for the timing of the first increase in the target federal funds rate — which has been held at 0-0.25% for the past several years — as well as projections of the “appropriate path of the federal funds rate over the next several years and the in the longer run.”
The new details on individual FOMC members’ views on interest rates and the economy comes as the Fed tries to offer more transparency into its thinking. Chairman Ben Bernanke has taken the lead in shepherding the central bank along that path, which has also included regular press conferences from the Fed chief after some FOMC meetings. (See “Bernanke Fed To Detail Rate Forecasts.”)
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Any additional clarity on the path of interest rates comes after the Fed has already made clear that it currently has no intention of upping rates until mid-2013. While the central bank has not restarted its purchases of U.S. Treasuries with QE3, Operation Twist, a program designed to lengthen the maturity of the Fed’s holdings, continues.