The Fed says that gas prices and the unemployment rate WILL go down...
A good friend of mine who works down at The Fed, just came back from a meeting where Bernacki and the Fed Governors have approved the folllowing statement for the press:
Fed notes better economy, takes no policy action
By MARTIN CRUTSINGER | Associated Press
WASHINGTON (AP) — The Federal Reserve offered a more positive view of the U.S. economy after a burst of hiring since its last meeting. It held off taking further steps to boost the recovery and reiterated its plan to keep short-term interest rates near zero until at least late 2014.
The Fed's statement issued after Wednesday's one-day meeting was more upbeat than the one it released in January.
The Fed said the unemployment rate has declined notably and should continue to fall as the economy expands moderately over the coming months. Household spending and business fixed investment continued to advance. And strains in the global financial markets have eased, though the Fed warned they continue to pose a threat.
The statement also said rising oil and gas prices will push up inflation temporarily. But it said longer-term inflation should remain stable — repeating a view expressed by Fed Chairman Ben Bernanke earlier this month.
The statement was approved on a 9-1. Atlanta Fed President Jeffrey M. Lacker dissented for the second straight meeting. The statement said Lacker doesn't "anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate through late 2014."
Stocks held their early gains. The Dow Jones industrial average was up 110 points before the Fed statement and stayed at that level shortly after the statement was released.
Consumers are more confident and have stepped up retail spending. Auto sales are rising. And the stock market keeps climbing.
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Most economists don't think the Fed will retreat anytime this year from its late-2014 target for any rate increase. Some note that threats to the economy remain from Europe's debt crisis and the run-up in gasoline prices.
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Eventually, the Fed will feel compelled to raise rates to curb inflation as the economy heats up. But some analysts think the Fed is reluctant to signal an eventual shift toward higher rates before it's close to a change. Signaling a change too soon might cause investors to push interest rates up before the Fed is sure the economic recovery will last.
http://news.yahoo.com/fed-notes-better-economy-takes-no-policy-action-181636867.html
Read entire article at the link...
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