Investors are waiting in anticipation for the Federal Reserve’s Federal Open Market Committee (FOMC), which is hosting a two-day meeting in Washington D.C., one of eight scheduled meetings of the year. The meeting, which may result in a change in the country’s monetary supply, began at 10:30 this morning and will culminate with a policy statement, scheduled for release Wednesday afternoon.
After the last meeting, the Federal Reserve released a statement Aug. 9 that it will keep the federal funds rate low, possibly at 0 to 1/4 percent, at least through mid-2013.
“The markets have hung a lot of hope that the Fed can fix economy with a few strokes of a pen. This week, that pen is busy – but in practical terms, there’s not a lot the FOMC can do to convince someone who’s losing their job that it’s going to be ok,” Guy LeBas, chief fixed income strategist with Janney Capital Markets, said.
LeBas said it is possible the Fed will purchase long-term treasuries but without increasing the monetary supply.
The FOMC consists of twelve members: the 7 members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.