WASHINGTON — Now that the economy is on the mend, the Federal Reserve this year can focus on how and when to pull back the stimulus money pumped out to fight the financial crisis. With his prospects for another term brightening, Ben Bernanke will lead that effort.
At their first meeting of the year, Fed policymakers are likely weighing such matters, including which tools to use. The officials are slated to issue a policy statement Wednesday when they wrap up their two-day session.
No major changes in rates or economic support programs are expected to be announced. The big question is whether Fed policymakers will signal their timing and strategy to reverse course.
“At some point, the Fed will have to start giving guidance about their exit-strategy plans,” said Chris Rupkey, an economist at the Bank of Tokyo-.
For now, the Fed is all but certain to leave its key bank lending rate, which affects consumer loans, at a record low near zero. Economists also expect the Fed to renew a pledge to hold this rate, called the federal funds rate, at record lows for an “extended period” - viewed as at least six months.
But some analysts …
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