Investors look to Fed for clues on rates - 13 WTHR Indianapolis

Investors look to Fed for clues on rates

Updated:
WASHINGTON -

The answer investors want most is the one they're least likely to get from the Federal Reserve at its meeting this week, despite any hints the Fed may drop.

Few investors expect the Fed to telegraph its intentions on slowing its bond purchases, which have kept long-term borrowing rates low.

The Fed might choose to clarify a separate issue: When it may raise its key short-term rate. The Fed has kept that rate near zero since 2008. It's said it plans to keep it there at least as long as unemployment remains above 6.5 percent and the inflation outlook below 2.5 percent.

Unemployment is now 7.6 percent; the inflation rate is roughly 1 percent.

Chairman Ben Bernanke has stressed that the Fed could decide to keep its short-term rate ultra-low even after unemployment reaches 6.5 percent.

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