9/1/2014 (Reuters) - Pressure is building within the Federal Reserve for officials to move as early as next month to more clearly acknowledge improvements in the U.S. economy and lay the groundwork for the central bank’s first interest rate hike in nearly a decade.
(MarketWatch) - The Federal Reserve has agreed to use interest rates on excess reserves as its main tool to set the federal funds rate and the bank plans to target a range instead of a precise number when it eventually raises rates, according to minutes of its July 29-30 meeting released Wednesday. For example, the bank now has a fed funds target of zero to 0.25%. In the past, the Fed would target a single number such as 3% or 4.5%. As expected, the central bank gave no timetable on when it expects to start raising the fed funds rate. Most analysts believe the Fed will wait until mid-2015 or so. Excess reserves refers to short-term assets that private banks keep inside the Fed.