The Federal Reserve has kept the short-term federal funds rate in a range of zero to 0.25% since late 2008, and the FOMC has repeatedly said this "highly accommodative" policy was likely to remain appropriate at least until the U.S. unemployment rate dropped below 6.5%. The July unemployment rate was 7.4%, improving from 7.6% in June.
The steepening of the yield curve is good news for most banks, however, it can take quite some time for it to provide a major boost to net interest margins, because some assets are still repricing at lower rates from several years back.
The Federal Reserve will hold its annual conference in Jackson Hole, Wyo., beginning on Thursday. According to KBW analyst Brian Gardner, "Given the lack of a keynote speech by Fed officials at Jackson Hole, the minutes will probably be the more significant of the two events this week as the markets search for further clues on the timing as well as the composition of tapering of large scale asset purchases."
Janet Yellen -- vice chairwoman of the Federal Reserve Board and considered the frontrunner by many to succeed Federal Reserve Chairman Ben Bernanke next year -- will not be giving a speech at the Jackson Hole Conference. However, she will moderate a panel discussion on Friday. "