Comparing US Federal Reserve's views on rate rise timing

AP News
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Posted: Jan 28, 2015 2:44 PM

A comparison of the Federal Reserve's statements from its two-day meeting that ended Wednesday and its meeting December 16-17:

INTEREST RATES:

Now: The Fed has dropped any reference to waiting a "considerable time" before raising rates: "Based on its current assessment, the (Fed) judges that it can be patient in beginning to normalize the stance of monetary policy."

Then: "Based on its current assessment, the (Fed) judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program."

INFLATION:

January: The Fed expects inflation will get lower, temporarily: "Inflation is anticipated to decline further in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate."

December: The Fed "expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate."

ECONOMY:

January: The Fed is more optimistic about the economy and job market: "Information received since the (Fed) met in December suggests that economic activity has been expanding at a solid pace. Labor market conditions have improved further, with strong job gains and a lower unemployment rate."

December: "Information received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace. Labor market conditions improved further, with solid job gains and a lower unemployment rate."

INFLATION AND ENERGY:

January: The Fed says inflation has gotten lower, but blames it more on falling oil and gas prices: "Inflation has declined further below the Committee's longer-run objective, largely reflecting declines in energy prices."

December: "Inflation has continued to run below the Committee's longer-run objective, partly reflecting declines in energy prices."