This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fed's New Voting Lineup Won't Likely Alter Policy

By MARTIN CRUTSINGER

WASHINGTON (AP) â¿¿ The cast of voting members on the Federal Reserve's policy committee is changing this year. Their policies probably won't be.

Chairman Ben Bernanke will likely retain a solid majority on the 12-member committee for his drive to keep interest rates low well into the future despite critics who worry about the risks.

As the committee meets for the first time this year, Bernanke and the six other members of the Fed's board in Washington will keep their votes. So will William Dudley, president of the Federal Reserve Bank of New York. All have permanent votes. But among the presidents of the 11 other Fed regional banks, four are losing votes and four are gaining them.

On Wednesday, when the Fed issues a statement after its two-day policy meeting, economists expect it to affirm that it expects to keep short-term rates near zero until unemployment dips below 6.5 percent from the current 7.8 percent. It will also likely say it will keep spending $85 billion a month on bond purchases until the job market improves "substantially."

The Fed's goal is to keep borrowing costs low to stimulate spending and economic growth.

The rotation of the Fed's roster of voting members occurs at the start of each year. All 19 officials on the policy committee take part in the meetings, which are held eight times a year. But only 12 get to vote.

Last year, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, was the lone dissenter at each of the eight meetings. Lacker said he thought the job market was being slowed by factors beyond the Fed's control. He also argued that further bond purchases would risk worsening future inflation.

With Lacker no longer a voting member, the Fed's policy decisions might be unanimous. But it isn't certain. Some others on the committee have also expressed concern that the Fed's low-rate policies could fan inflation or encourage speculative buying of assets like real estate or stocks.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs