Fed mulling over hike on 'meeting by meeting' basis

Washington

THE Federal Reserve is preparing to consider interest rate hikes "on a meeting by meeting basis", Fed chair Janet Yellen told a congressional committee on Tuesday in a subtle change of emphasis in how the Fed has been speaking about its plans for the first interest rate increase since 2006.

In prepared remarks to the Senate Banking Committee, Ms Yellen described how the Fed's rate-setting policy committee will likely proceed in the coming months - an effort to increase the Fed's flexibility and mute any potential market reaction as the central bank approaches its "lift-off" date.

The committee will first drop the word "patient" from its statement, part of a phrase used since December to describe the Fed's approach to the timing of an initial rate hike, Ms Yellen said. But that is no guarantee rates will be raised at any given point, Ms Yellen said. Rather …