The Federal Reserve's policy committee meets on Tuesday and Wednesday. Remarkably, no one will be paying much attention.
Wall Street thinks it has a pretty good handle on what the central bank is thinking.
The Fed revealed earlier this month in the minutes of the June 17-18 meeting of the policy committee that the extraordinary and controversial bond-buying program will end in October. In subsequent congressional testimony, Fed chair Janet Yellen made clear that she's not worried by inflation, and that interest rates will stay ultralow even as economic growth picks up in the months ahead.
"This may be one of the more unanticipated meetings we've had in quite some time," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
Instead of gearing up to parse the text of the Fed's policy statement on Wednesday afternoon, Mr. Porcelli and his peers are counting on a couple of indicators to inform their opinions of where monetary policy is headed.
On Wednesday morning, the Commerce Department is scheduled to publish its first estimate of second-quarter economic growth. On Friday, the Labor Department releases its July survey of the hiring.
American employers created more jobs in the first six months of 2014 than in that same period since 1999. Most analysts expect that trend to continue, as the median estimate of Wall Street economists is that non-farm payrolls increased in excess of 200,000 for a sixth consecutive month in July. The unemployment rate could drop to 6 per cent, which would be the lowest since July, 2008.
The GDP report matters less, but could stir up more interest. Gross domestic product cratered in the first quarter, contracting 2.9 per cent, as brutal winter weather wreaked havoc across an unusually large swath of the United States.
Every indicator shows there was a rebound in the spring, and the GDP report will be the first glimpse at the force of the bounce back. (Two revised estimates will follow the initial reading on Wednesday.)
The consensus is that the economy expanded at an annual rate of about 3 per cent in the second quarter. RBC sees a rate of 4.2 per cent, indicating there is potential for a positive surprise.
Any surprise would have to be massive to knock the Fed off the course it has set. Ms. Yellen's willingness to end the bond-purchase program on schedule appears to have calmed the minority on the policy committee who worried the Fed was getting carried away with stimulus. Yet there is little doubt the Fed intends to leave its benchmark rate pinned at zero until well into 2015. There were no dissents at the June meeting and financial markets are exceptionally placid.
This period of calm is a testament to Ms. Yellen's communications strategy.
If roiling financial markets constitutes a blunder, the only mistake Ms. Yellen has made occurred early in her tenure, when she said the first interest-rate increase could come six months after the end of the Fed's bond buying. While she clearly was ball-parking, some investors were spooked because "six months" after the end of quantitative easing implied the benchmark could rise from zero in the first half of 2015 rather than the second half of the year.
Ms. Yellen since has reverted to abstractions.
Yet that still has left investors with a clear enough idea of where the Fed is headed. The central bank now provides a breakdown of when members of the policy committee think the first rate increase will occur.
Ms. Yellen also is letting the American public get to know her, co-operating with profiles in Time and the New Yorker magazines, the latter of which characterized the Fed chair as intent on re-establishing the Keynesian tradition as the dominant force in economic policy making. The takeaway from both is that the Yellen Fed's top priority is jobs.
Herding investors will remain difficult. Many dislike the direction the Fed is forcing them and will look for opportunities to break away. That will happen at the moment the Fed's message becomes confused.
The International Monetary Fund last week said the U.S. central bank should consider releasing quarterly reports on the economy and scheduling more frequent press conferences to guard against minority opinions being misinterpreted as the institutional consensus.