The Fed always has the power to shock but one idea that has morphed into an expectation is that the Fed will prolong its pledge to keep rates low.
In January, the Fed announced that conditions are “likely to warrant exceptionally low levels for the federal funds rate at least through late 2014″. Six months later, the economy hasn’t improved so the pledge is likely to be extended until “mid-2015″.
It’s a move I have been talking about for a few weeks but economists now seem to agree that it strikes the right balance of action without appearing overly active.
The WSJ has a roundup of the latest Fed commentary.