Fed closer to clearer guidance on first rate hike (by Greg Robb)

WASHINGTON (MarketWatch) - Federal Reserve officials are closer than previously thought to revamping the central bank's guidance on what economic conditions would have to be in place before interest rates rise for the first time since the financial crisis, according to minutes released Wednesday. The minutes of the Oct. 23 and Oct. 24 meeting showed that the 19 Fed officials "generally favored" the use of economic variables in their guidance. At the moment, the Fed is relying on a calendar date, saying it expects to keep rates near zero until mid-2015. The new approach would be some variant of a plan offered by Chicago Fed President Charles Evans, who wants the central bank to tell the market it will keep rates low until the unemployment rate falls below 7%, as long as inflation remains below 3%. The minutes show that a number of practical issues need to be solved before officials would decide to use these "economic thresholds." A "number" of officials, according to the minutes, think the Fed will likely need to buy more assets once its "Operation Twist" stimulus program wraps up in December. Fed officials also could not agree on a consensus economic forecast.