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Fed kicks off two-day meeting today
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Fed Chairman Ben Bernanke (AP Photo/Charles Krupa)
The Federal Reserve kicks off its two-day meeting today without all the drama normally associated with the potential for a rate change.
The Fed has held its key rate at 0 - 0.25 percent for nearly a year, and it is a near certainty that policymakers will leave the fed funds rate at its current level.
The Committee will probably maintain the phrase, "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period," but the recent pick up in economic activity has heightened chatter that Fed members may tweak the language by the end of the year.
Still, with unemployment in an upward trend and weekly jobless claims stuck above 500,000, even a small rate hike by the end of the year designed to send a message that officials are serious about containing inflation and defending the dollar seems extremely remote given the political pressures lawmakers face from the lack of job creation.
Until we begin to see nonfarm payrolls move higher, the fed funds rate is likely to remain near zero.
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