Federal Funds Rate Below 1% til End of 2014

No good news for the economy seen here except that inflation remains low. Hopefully the Federal Reserve has a pessimistic view. And we will count on small business to change that forecast with all of their hard work. Always remember that small business is where the growth is! Go get’um folks and let’s turn things around !!!
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By Joshua Zumbrun and Craig Torres

Jan. 25 (Bloomberg) — Nine of 17 Federal Reserve officials expect borrowing costs will remain below 1 percent at the end of 2014, with six officials expecting zero rates to remain into 2015.

Policy makers also lowered their estimates for growth and inflation in 2012, a move consistent with their statement earlier today that interest rates will remain “exceptionally low” through at least late 2014.

The projections by Federal Open Market Committee participants, released for the first time today in Washington, provide an unprecedented look at policymakers’ plans for the path of the benchmark interest rate, which has remained near zero since December 2008.

An increase in 2014 would mark the first rise in the fed funds rate since June 2006. The Fed released the expectations of the five Fed board members and 12 district bank presidents after the FOMC today said they expect “to maintain a highly accommodative stance for monetary policy” in order to “support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate.”

Not all officials agree on when and how quickly the Fed should raise rates. Three officials say the Fed should raise rates in 2012, three say the Fed should raise rates in 2013. A group of five policy makers says rates should rise in 2014 while four say the central bank should wait until 2015 and two until 2016.

Fed officials estimate 2012 growth in U.S. gross domestic product centered around 2.2 percent to 2.7 percent, measured from the fourth quarter of last year to the fourth quarter of this year. In their November estimates they saw growth of 2.5 percent to 2.9 percent.

Three Highest

For 2013, U.S. growth is projected at 2.8 percent to 3.2 percent according to the central tendency forecast, which excludes the three highest and three lowest projections.

Policy makers see 2012 inflation falling below their goal of 2 percent, with most expecting inflation on the personal consumption expenditures index between 1.4 percent to 1.8 percent, down from 1.4 percent to 2 percent in November.

The committee today left unchanged its plans to lengthen the maturity of its bond portfolio and maintain its mortgage-backed securities investments.