WASHINGTON — When the Federal Reserve issues a policy statement after it meets this week, the financial world will be on high alert for two words:
“Considerable time.”
The presence or absence of that phrase will trigger a rush to assess the likely timing of the Fed’s first increase in interest rates since it cut them to record lows in 2008.
The Fed’s recent statements have said it expects to keep its key short-term rate near zero for a “considerable time” after it stops buying Treasurys and mortgage bonds. Those bond purchases have been intended to keep long-term rates down to support the economy.
But the purchases are set to end in November, so the Fed may soon see the need to use some phrasing other than “considerable time” to signify when it might start raising rates.
Most economists think the Fed will raise rates starting around mid-2015.
