Fed Keeps Options Open

So the Open Market Committee of the Federal Reserve Board met and made it clear that it was going to keep its options open even if previously established “triggers” for a change of policies were met. Here’s how WaPo’s Ylan Mui described the Fed’s position:

The nation’s central bank said Wednesday it will look at a broad swath of indicators – including job market data, inflation expectations and financial developments – as it determines when to raise rates for the first time since the recession hit.

Mui interprets this as meaning that an interest rate hike could be on the way. I’m no economist–much less a professional Fed-watcher–but it seems to me the more immediate thing being signaled is that interest rates will not necessarily go up if the Fed’s prior target of 6.5% unemployment is reached. I certainly hope I’m right about that.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.