The Fed is struggling with one key sentence in its post-meeting statement

Jerome Powell

  • The Federal Reserve is considering a key milestone in its public communication about the path of interest rates.
  • Wall Street economists think a language change is coming that will signal monetary policy is no longer loose, meaning interest rates are no longer seen as particularly low.
  • This week’s meeting may be too soon; it’s more likely such a shift will come in September, when the Fed is next expected to raise interest rates.

Federal Reserve officials meeting this week are grappling with an important milestone in their effort to raise interest rates gradually without derailing the economy: When to tell the world that interest rates are no longer all that low — or more accurately, that monetary policy is no longer “loose.”

This is how the internal debate at the US central bank was characterized in minutes to the Fed’s June meeting. 

See the rest of the story at Business Insider

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