Federal Reserve officials are expected to keep interest rates stable at their two-day meeting ending Thursday. They will probably discuss the economy, financial markets and the future path, including themes.
This will be Fed Chairman Jerome Powell's last meeting without a press conference afterwards.
The Central Bank issues a policy statement at. 2 pm ET, and officials do not release new economic projections.
Here's a look at the most important issues to be discussed:
Employers have added jobs at a steady pace, likely tightening Fed officials' plans to raise interest rates in December. Their statement will again describe the labor market so strongly.
On the other hand, the interest rate sensitive housing sector weakens, among other things, rising housing rates. And business investment was surprisingly soft during the third quarter.
Official rates in September ended describing prices as "accommodating" or low enough to stimulate the economy. Mr. Powell said that prices were still accomodative, but the language had become obsolete because it no longer said anything meaningful about politics in the future.
The challenge at the forefront is to analyze economic and economic development to determine whether prices go closer to a neutral setting that does not track or slow down growth.
Do not be surprised if the statement does not mention the last point of sale in equity and bond markets, which has tight financial conditions since officials last met in September.
Fed Officials Port Signed no serious concerns about the latest market volatility or financial conditions to a greater extent. On the contrary: rising property values earlier this year raised concerns about profits and risk takings in financial markets.
To draw attention to changing market conditions will probably be interpreted by investors who indicate less urgency to further increase the rates. The last time the Fed statement highlighted the weakening of market conditions, by the end of 201
The IOER Sideshow
Some analysts have focused on a development in the follow-up to this week's meeting on movements in short-term money markets that have led Fed officials benchmark federal funds closer to the top of the target between 2% and 2.25%. When this happened in April, officials changed the way they set prices in June to keep them closer to the centerpiece of the series.
The solution was to change the way they set the speed on the upper limit of the Fed food pays on surplus reserves, or deposits parked on the Fed of Private Banks, called IOER.
Until June, Fed had lifted this rate with the same amount as the fund rate by 0.25 percentage points – each time it raised interest rates since the end of 2015. In June, it increased the IOER by only 0.20 percentage points to keep effective math funds tight the middle of its range.
Despite the market speculation of a possible reduction in IOER this week's meeting, there appears to be no certain technical conditions for such a cut. Furthermore, cutting the IOER frequency could create additional communication challenges, as it would come to grips with Tuesday's midterm elections and President Trump's criticism of the central bank's interest rate hike. In May, officials indicated that they were more comfortable cutting the IOER rate, compared to the top of the food field, at a meeting when they raised the fund's interest rate.
Fed officials believe that the upward pressure on the benchmark price is due to market developments that are not related to the gradual winding up of the bond portfolio, which dropped to around $ 4.1 trillion in October from $ 4.5 trillion a year earlier. The drain is drainage of bank reserves from the system. At some point, this will probably put pressure on the food fund rate.
The Fed is July 31-August. One meeting, Mr. Powell signaled that he would begin a debate on this week's meeting on a broader question of how the Fed controls the food feed, which will help determine how long the drain continues.
If they return to the approach used before the financial crisis in 2008, it would require fewer reserves and a small portfolio, which means that the drain could continue well into the next decade. If they maintain the current framework, they will have more reserves and a larger portfolio, which means that the drainage can end in the next couple of years.
This week's meeting will be the sixth since Mr. Powell became chairman and he has not yet encountered any disagreements. That stretch will continue for now.
The nine-member scandal committee will have a new member this week since it is the first meeting to be met by new president Mary Daly in San Francisco. Kansas City Fed President Esther George had voted for the last two meetings as an alternate member who holds a vacancy in the San Francisco Federal Presidency.
Write to Nick Timiraos at firstname.lastname@example.org