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Fed to offer forecasts of key interest-rate shifts
Posted By -NO AUTHOR- On 01/04/2012 @ 12:29 pm In Front Page,Money,U.S. | No Comments
The Federal Reserve, taking an innovative step in its public statements, will start providing a quarterly forecast of when it plans to make a shift in the key short-term interest rate that it sets — its latest effort to spur the sluggish economy and calm volatile stock markets.
The projections, to start late this month, could act as an economic stimulus by offering a tentative financial road map to consumers and businesses to encourage them to borrow and take risks. It also could help ease market tension and push down already historically low yields on long-term bonds.
The greater transparency should “encourage more risk taking if speculators know where the cost of funds would be for a longer time,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago.
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