Next Week: Will the Fed REALLY Go To 0%?

January 23, 2009 by Trader Rich

Fed expects to leave rates near zero for the foreseeable future, but will they actually reach 0%?A few months ago, some were predicting that either this month or next month, the Fed rate could drop to 0%. Recent rhetoric coming out of the Fed, however, doesn’t seem to indicate that such a drop will come next week, when the the Fed’s Federal Open Market Committee (FOMC) announces its rate decision.

Right now, the Fed rate is at 0.25%, and the committee seems content to keep things at that level for quite some time. So, if the Fed won’t be setting interest rates and making new decisions for a few months, what will it be doing? CNN Money reports that the FOMC plans to meet and then issue statements on the economy:

With that in mind, the Fed provided some hints last month about what to expect at future FOMC meetings. A senior Fed official told reporters that the FOMC would continue to meet on its regular schedule, and it would provide statement’s about the central bank’s view of the state of economy.

With this economy, the FOMC will have plenty to talk about.