Bottom Line - Fed adds more punch to low-rate pledge If the Federal Reserve pledged to keep interest rates low for years (honest, we promise) businesses and consumers are more likely to borrow more and get the economy moving again. At least that's the strategy behind the central bankers" new policy, expected to be rolled out today, of explaining how long Fed policymakers plan to keep interest rates near zero and when they might begin thinking about moving them higher. The plan may trade credibility for transparency, some economists warn. The Fed has been moving in this direction for some time; last year, the Fed added a line to its otherwise dense post-meeting comments pledging to keep rates low through 2013. On Wednesday, the Fed's Open Market Committee said the economy isn't growing fast enough to prod the economy to create jobs. Because of that, it will not raise interest rates until at least late 2014, even longer than investors expected. It was the only substantial change in the statement. Unemployment stood at 8.5 percent at the latest reading in December, with 13 million Americans who would like a job unable to find one. Investors will get a closer look at how widely the panel agreed to extend its low-rate pledge. The Fed plans to release a chart showing exactly how many of its 15 members believe rates will remain flat and when they will begin to move higher. The hope is that by being more specific the Fed will boost confidence that interest rates will stay low, and higher confidence will encourage investment and spending that would give the moribund economy a lift. The plan has its risks down the road for Fed officials as economic conditions change. Though the full disclosures are being billed as "expectations," investors have come to view the pronouncements as commitments. But if events overtake the Fed's current thinking, those commitments may have to be altered. That could undermine the credibility of these forecasts, according to Credit Suisse economists. "Eventually, the Fed is bound to discover it cannot live up to the policy trajectory communicated to the market," they wrote in a recent note explaining the changes in Fed's communication strategy. When this happens the Fed will have enhanced its transparency at the expense of its credibility. And between those two assets, credibility is by far the more important. That, the economists argue, could have "the perverse effect of encouraging greater volatility in the fixed income markets, especially when the FOMC eventually starts forecasting higher funds rate targets." Promising to keeping rates low to spur borrowing and spending may be a double-edged sword. Potential home buyers, for example, may be happy to to sit on the fence as long as they don't have to worry about missing out on record low mortgage rates. "It may take the floor away from the housing market," said Douglas C. Borthwick, managing director at Faros Trading. With no apparent need for buyers to lock in lower rates today they may be more encouraged to wait a little while longer to pull the trigger. Why buy today when there may be more supply tomorrow? Since the Recession of 2007 and the biggest housing collapse since the 1930s, the Fed has thrown pretty much everything in its toolkit at the financial system to try to revive the economy. The conventional moves targeting short-term lending have been followed by unorthodox schemes that included massive buying of mortgage bonds and a switch in the maturities of Treasury bonds to drive down longer-term rates. Economists generally believe the moves succeeded in heading off a deeper financial and economic collapse. But the economy is still growing slowly and the job and housing markets are still badly broken. The Fed's new rate-forecast policy may already be having the desired impact; as details of the Fed's new policy have been disclosed, interest rates on US Treasury bonds, a bellwether for borrowing costs from mortgages to corporate commercial paper, have been edging lower.