Looking for any anchoring adjustments

The American economy has a lot going for it. More people are getting vaccinated against COVID-19 each day, new stimulus checks will be showing up in the bank accounts of most Americans beginning this week, inflation is low, interest rates are low, and the job market is improving.

And the Federal Reserve is not about to change its tacking when its interest rate setting committee meets for two days in the week ahead.

In December, the central bank clearly anchored expectations that it would keep its target borrowing rate near zero percent through at least the end of next year.

Through a January COVID spike, a tumultuous presidential transition period that featured a deadly insurrection on Capitol Hill, and a sharp jump in market interest rate, Fed leaders have been clear in their chorus of public comments promising patience.

The group is a deliberative body preferring internal esoteric debate in search of consensus than making big, unexpected waves.

This week’s meeting comes days after Fed

Chairman Jay Powell welcomed a pick-up of inflation as the economy continues to pull itself out of the pandemic panic. He didn’t outright condemn inflation and that helped feed worries about inflation.

However, last week’s inflation data continued to show tame pricing pressures.

The Fed has been buying tens of billions of dollars of U.S. government and mortgage-backed bonds per month. It is part of its strategy to push down and keep market interest rates low. This part of the bank’s work is where investors are looking for early winds of change in the Fed’s actions.

The agency’s two fixed points remain stable prices and maximum employment. Any change in tack will remain moored to those mandates.