No major announcements are expected from the Federal Reserve governors and regional bank presidents who are gathering in Washington on Tuesday for a two-day monetary policy meeting.

Instead, the big news is expected in September, when half of the economists polled by Bloomberg anticipate that the Fed will begin tapering its monthly stimulative bond purchases from the current $85 billion level.

None of the respondents expected the slowdown to come at this week’s meeting. But the committee could signal at the conclusion of its meeting Wednesday that the tapering would begin later than September. The Fed could also clarify its plans regarding the other part of its stimulus program, namely the promise to keep interest rates near zero until the 7.6 percent unemployment rate falls below 6.5 percent.

Fed Chairman Ben Bernanke has asserted on a number of occasions that 6.5 percent unemployment is a “threshold” rather than a “trigger” for raising rates. He also said recently that “the unemployment rate probably understates the weakness of the labor market.” The Fed could clarify what other indicators it will look at when it considers raising interest rates. Some analysts think that it might add inflation into the mix – meaning that if inflation is below a certain level, perhaps 1.5 percent, rates would remain at zero.

In making determinations about how to change its monetary policy, the Fed will look at how the economy has progressed or weakened since its last meeting.

Stock markets gains leveled off in May when Bernanke told Congress that the Fed could reduce the size of its monthly asset purchases “in the next few meetings,” and then fell after his June 19 press conference when Bernanke sketched out a timeline for the taper that had it beginning in the fall.

Since then, however, the stock markets have clawed back many of its losses. Here’s the Dow Jones, via Marketwatch:



Housing prices, a focal point for the Fed, have also continued to rebound from the collapse in recent weeks. Calculated Risk shows the long view of housing prices:



Since the last Fed meeting, there has been one jobs report, which showed a gain of 195,000 jobs total, right in line with previous months:



Not all the economic data is pointing in the same direction, though. One half of the Fed’s mandate is to promote stable prices. Inflation has been trending down, including in the last month. Bernanke has said of inflation that “we’re committed to defending the target from below as well from above,” meaning that the Fed will boost the money supply if inflation falls too far below the 2 percent target.

The top two lines on this chart show headline inflation according to two measures, the CPI and the PCE index. The bottom two show inflation stripping out food and energy components, which Fed officials believe gives a better sense of the underlying trend of inflation:



Lastly, some Fed officials, including vice chairman Janet Yellen, the frontrunner to replace Bernanke when his term expires in January, have said that they look at the number of people quitting their jobs each month as an indication of the economy’s health. The idea is that workers feel more confident to quit when the labor market is healthy and other jobs are available. The quit rate, found in the Labor Department’s Job Openings and Labor Turnover Survey, is still too low compared to where it was before the recession, as this Wall Street Journal chart shows: