UBS’s Matus Says Fed May Drop ‘Exceptionally Low’ Rate Wording

The U.S. Federal Reserve may drop language promising “exceptionally low” interest rates through the middle of next year from its policy statement, according to Drew Matus, senior U.S. economist at UBS (UBSN) Securities LLC.

“There is a one in three chance” the Fed will eliminate the wording, Matus said today in a radio interview on “Bloomberg The First Word” with Ken Prewitt. The promise of low rates may “conflict” with the central bank’s forecast, he said.

This week, for the first time, the Fed will provide forecasts for its benchmark interest rate target, which has been near zero for more than three years.

To contact the reporter on this story: John Tucker in New York at jtucker@bloomberg.net

To contact the editor responsible for this story: JoAnne Norton at jnorton@bloomberg.net