Federal Reserve likely to reiterate flexible policy on rates

Federal Reserve Chair Janet Yellen makes it clear the Fed will keep all options open in deciding when to raise interest rates from record lows
By MARTIN CRUTSINGER, AP Economics Writer Published: April 29, 2014
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In brief

Fed keeps up rate options

In her first weeks as Federal Reserve chair, Janet Yellen has made one thing clear: The Fed will keep all options open in deciding when to raise interest rates from record lows.

Gone are the benchmarks that her predecessor, Ben Bernanke, used to try to guide investors: That by a certain date or when unemployment reached a specific rate, the Fed would consider slowing its stimulus.

In a speech this month, Yellen said the Fed “must respond to significant unexpected twists and turns the economy may take.”

On Wednesday, when it ends a policy meeting, the Fed will likely repeat that theme and echo a point it made after Yellen’s first meeting as chair last month: That even after the job market strengthens and the Fed starts raising rates, it will likely keep rates unusually low to support a still-subpar economy.

Associated Press