Monetary Policy to Remain Expansionary for Foreseeable Future

The Lehmann Letter (SM)

Today the Federal Reserve’s Open Market Committee – which controls monetary policy – said:

“…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. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run….”

Note the Committee’s strong bias to expansion.

Don’t expect the Fed to raise interest rates soon.

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© 2014 Michael B. Lehmann