NEW YORK (TheStreet) -- The most recent Federal Reserve statement indicated the reserve bank is still on schedule to reduce its monthly bond purchases by this coming fall and speculation is now rising about when the first rate hike will come into play. The majority of economists and market watchers anticipate that a rate hike will be announced in the first half of 2015, but there are still many economic factors that could affect that decision.
This current release exhibited less concern about inflationary effects but a growing worry about the slack in the labor market. An improving jobs market is one of the economic signals that the Fed will use to determine the timing of fiscal policy tightening.
This balancing of dovish and hawkish commentary is one reason to believe that the Fed is hedging its bets when it comes to keeping interest rates low for an extended period of time.
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