Fed May Alter Rates As Economy Expands

Summary


WASHINGTON - Federal Reserve Chairman Ben Bernanke and his colleagues may shift from focusing on the gap between actual and optimal employment to an emphasis on the economy's speed limit in the months ahead.

"By the middle of the year, the economic momentum will be building, and all the hawks are going to be crazy about tightening," said Laurence Meyer, a former Fed governor who's now vice chairman at St. Louis-based Macroeconomic Advisers, referring to officials who concentrate on fighting inflation.

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Fed May Alter Rates As Economy Expands

Policy makers, who meet this week to plot monetary strategy, will begin to increase the benchmark federal funds rate in January 2012, he predicted.

The Fed increasingly will confront a key question as the year wears on: Does a con...

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