This week is as big as they come for economic news.

Tuesday and Wednesday, the Federal Reserve’s policymaking committee meets to consider what comes next for monetary policy. The basic outcome of the meeting is largely a foregone conclusion: The central bank will probably leave its target interest rate near zero, and it will proceed with previously announced plans to wind down a program to purchase $1.25 trillion in mortgage-backed securities by the end of March 2010.

Fed watchers will be scrutinizing the statement released Wednesday afternoon after the meeting for signs that the central bank is starting to eye an end to its zero-interest-rate policy, particularly backing away from language in recent statements that rates are likely to remain «exceptionally low» for «an extended period.»

But market chatter notwithstanding, don’t bet on a change. The economic outlook has, if anything, become more muddled since the Fed’s last meeting at the end of September. And already fragile markets would be likely to react dramatically to even the slightest hint that the Fed may be ready to raise rates. Finally, and most simply, many Fed policymakers think that the economy is so weak that zero interest rates are likely to be necessary for quite a bit longer, and so they would be disinclined to send any signal otherwise.

Friday is the day for the October jobs report, which economists expect will show that the unemployment rate rose to 9.9 percent from 9.8 percent and that employers shed another 175,000 jobs. Those numbers would be a welcome change from a disappointing September report, when employers cut 263,000 jobs.  Read the rest of this entry »