* Further $10 billion trim to monthly bond buying on tap
* Quarterly rate hike projections to be scrutinized
* Decision due at 2 p.m. EDT/1800 GMT; Yellen news briefing
By Howard Schneider
WASHINGTON, June 18 The Federal Reserve's policy
committee concludes its latest meeting on Wednesday with little
change expected in its outlook for interest rates but the
potential for new details to emerge on the planned exit from its
current easy monetary policy.
The U.S. central bank is widely expected to decide on a
further $10 billion reduction in its monthly bond buying,
staying on course to shutter the program entirely by year end.
It will announce its decision and release fresh economic and
interest rate projections at 2 p.m. EDT (1800 GMT). Fed Chair
Janet Yellen will hold a news conference to discuss the results
a half hour later.
The interest rate "dots" plotting the views of each
policymaker will be watched closely for any shift in the
expected timing or pace of rate increases, and for whether
officials lower their view of the long-run target interest rate
in response to a diminished sense of the economy's potential.
The Fed cut overnight rates to near zero in December 2008 as
it battled the financial crisis and deep recession.
Investors in futures markets predict it will finally lift
them in June 2015, while the consensus of economists in a
Reuters poll released on Tuesday expected the Fed to begin
raising rates in the third quarter of next year.
The meeting will include a few new faces around the table:
Fed Vice Chair Stanley Fischer and Fed Governor Lael Brainard.
Brainard, however, was sworn in too late to submit economic and
interest rate projections.
While the Fed's policy statement is still expected to call
for rates to remain near zero "for a considerable time," Diane
Swonk, chief economist at Mesirow Financial, said she expected
the individual forecasts to begin to diverge.
Many economists have cut their growth forecasts for the year
due to a dismal first quarter that was largely the product of
severe winter weather but also reflected a slower than expected
expansion of housing and business investment, and the Fed is
expected to follow suit.
Though growth is expected to accelerate in 2015, Swonk said
there are doubts the recovery is robust enough for the Fed to
feel confident about a rate increase.
"It is a sense of two steps forward, one step back," said
Swonk as she presented a mid-year forecast of the Securities
Industry and Financial Markets Association on Tuesday. The Fed
"is going to stay the course, but I think you are going to see
more uncertainty" in the economic outlook and more dispersion
among officials about when rates should rise.
One central issue facing the Fed as it contemplates a move
away from its crisis-era monetary policy is whether and for how
long to keep its bloated balance sheet from shrinking by
reinvesting proceeds from maturing securities it holds. The Fed
has more than quadrupled its balance sheet to $4.3 trillion
through a series of large-scale bond purchases.
If any decisions are taken, Yellen could make an
announcement at her news conference.
(Reporting by Howard Schneider; Editing by Paul Simao)