Federal Reserve: Continuing ‘Accommodative’ Policy, But Change Is Coming

0 Shares

The Federal Reserve announced Wednesday that it plans to continue its “highly accommodative” monetary policies and will begin the process of reducing stimulus and bond purchases later in the year if unemployment rates continue to decline.

The Fed’s announcement was preceded by much speculation from economic analysts that the central bank would effect — or, at least, would lay the groundwork for — economic policy changes to move the economy away from easy money. An improved economic outlook has elicited more frequent suggestions by members of the Fed that the central bank should reduce the pace of asset purchases in coming months.

But fickle market behavior at the mere suggestion of policy changes is indicative of potential economic disaster that could occur should the Fed misstep.

“In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments,” said a statement from Fed officials. “When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.”

Despite the optimism, the Fed’s projections are not as accurate as many economy watchers would like — a point handily noted by projections Fed officials have made with regard to gross domestic product growth. Whether the Fed’s economists are just really bad at predicting economic outcomes or they intentionally make overly optimistic projections to spur consumer confidence, the central bank has consistently predicted growth that has been almost twice what occurred since 2009.

Sam Rolley

Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After covering community news and politics, Rolley took a position at Personal Liberty Media Group where could better hone his focus on his true passions: national politics and liberty issues. In his daily columns and reports, Rolley works to help readers understand which lies are perpetuated by the mainstream media and to stay on top of issues ignored by more conventional media outlets.

Join the Discussion

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

  • village idiot

    More hopey changey? The question is who if anybody will get the small change?

  • jim b

    The pudding is all but gone! Time to eat your meat!