Fed Backs Away from Interest Rate Threshold

Federal Reserve policymakers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5 percent.

With the jobless rate falling faster than expected even as other labor-market indicators show weakness, policymakers agreed it would “soon be appropriate” to revise their guidance about how long the era of low interest rates will remain, according to the minutes of the Jan. 28-29 meeting released Wednesday.

Several policymakers also said that in “the absence of an appreciable change in the economic outlook, there should be a clear presumption in favor” of continuing to trim the Fed’s bond purchases by $10 billion at each meeting.

Central bankers are seeking to provide clarity on their plans for continuing to support the economy, both with low interest rates and dwindling bond purchases, after unemployment dropped last month to 6.6 percent, the lowest in more than five years.

read more at: http://www.utsandiego.com/news/2014/feb/20/tp-fed-backs-away-from-interest-rate-threshold/

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