Federal Reserve Plays Down Own Forecasts for Rate Rise

Policymakers worry the market is overreacting to its interest-rate projections, according to the FOMC minutes.

The Federal Reserve played down forecasts by some of its own policy makers that interest rates might rise faster than they previously predicted.

“Several participants noted that the increase in the median projection overstated the shift in the projections,” according to minutes of the March 18-19 meeting of the Federal Open Market Committee released today. Some expressed concern the rate forecasts “could be misconstrued as indicating a move by the committee to a less accommodative reaction function.”

Wide Range

The FOMC said last month interest rates will probably remain low for a considerable time after asset purchases end, and that it will weigh a “wide range of information,” including labor-market measures, in considering when to raise the benchmark rate.

Company Sales

Sales by companies in the Standard & Poor’s 500 Index probably climbed during the quarter by 2.9 percent from a year earlier, according to estimates compiled by Bloomberg. The index jumped 30 percent last year, the best performance since 1997, fueled in part by Fed stimulus.

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