The Fed's Baby Step Toward Higher Interest Rates

The Federal Reserve moved almost imperceptibly today, Dec. 17, toward eventually raising interest rates in a statement that Fed watchers called surprisingly dovish. As expected, the rate-setting Federal Open Market Committee replaced its pledge to keep its key lending rate near zero for a “considerable time,” saying instead that “the committee judges it can be patient” about tightening monetary policy.

Trying to play down the importance of the change in language, the Fed stressed that “the committee sees this guidance as consistent with the previous statement.” Fed Chair Janet Yellen said in a press conference that the committee didn’t anticipate raising rates “for at least the next couple of meetings.” That would push the first rate hike to April at the earliest, although Fed watchers expect the move to come later than that.