The more things change, the more they stay the same, at leastwhen it comes to predictions from the Federal Reserve's Federal Open Market Committee.

In the wake of this week's meeting, FOMC members remainoptimistic, but admitted that anticipated progress will be sloweven in the face of an inflation figure edging its way toward2%.

In a July 30 statement, the FOMC acknowledged slow or noprogress in key consumer indicators required for a full economicrecovery. But the committee's press release tried to remainbuoyant, even given a lack of meaningful growth in jobs andhousehold income, in the hope that happy days may soon be hereagain. The strategy in the attitude was a decidedly deliberate one,said Greg McBride, chief financial analyst for consumer financewebsite Bankrate.com.

“Coming into the meeting the FOMC did not want to rock theboat,” McBride said. “2014 has been a pretty good year as far asthe Fed was concerned. Stock prices have spiked and the bond marketis performing well. There has been some improvement in jobs aswell.”

But there has not been enough improvement to change the pace ofprogress, which gained speed during the second quarter, but hasfailed to catch fire in any meaningful way, according to theanalyst.

“There were no real surprises in the current statement, onlysubtle changes in some of the language compared to previous meetingreports,” McBride said. “I don't think today changes anything.We're still in a slow-growth environment. This is largely in linewith what we predicted and I am reassured they have made someacknowledgment of inflation.”

When it comes to measuring inflation, the Fed looks at personalconsumption expenditure index at the core level, McBride said.Currently, that rate is running at about 1.5% and it has picked upin each of the past several months. There is reason to assumeprogress will continue move, albeit slowly.

“A lot of investors have felt that until now the Fed has beenwhistling past the graveyard of inflation,” McBride said. “Today'sstatement indicates that recent increases have not goneunnoticed.”

Increasing inflation means the Fed will need to accelerate thetimetable on raising its rates, something for which many financialinstitutions have been prepared for months. Today's meeting yieldedno indication of when rates would rise, a factor perhaps bestdetermined by the rapidity with which inflation rises. However,mid-2015 still seems to be the popular consensus, McBride says.

“If the economy continues to plod along, they won't have upsetthe applecart by singing the same tune,” McBride said. “But,reassuringly, they have gotten the memo on inflation.”

The FOMC is taking deliberate steps in support of its cautiousoptimism. According to the press release, the FOMC will beginreducing the pace of its asset purchase program in August to $10billion per month, down from the rate of $15 billion. Thecommittee also will add to its holdings of longer-term Treasurysecurities at a pace of $15 billion per month rather than thecurrent $20 billion per month.

In addition, the FOMC will maintain its existing policy ofreinvesting principal payments from its holdings of agency debt andagency mortgage-backed securities in agency mortgage-backedsecurities and of rolling over maturing Treasury securities atauction. The committee's sizable and still-increasing holdings oflonger-term securities should maintain downward pressure onlonger-term interest rates, support mortgage markets and help tomake broader financial conditions more accommodative. The pressureshould promote a stronger economic recovery and help ensure thatinflation, over time, progresses at a consistent rate, the pressrelease noted.

Those efforts will no doubt be beneficial, but little meaningfulprogress will occur until jobs increase and household income risessignificantly, McBride said. This will create an uptick inborrowing and spending necessary to have a meaningful impact oneconomic growth. Unfortunately this not progress the Fed canmandate.

“The Fed can't create more jobs or higher household income,”McBride said. “They can't create demand and for years I believethey have been pushing on a string in trying to jumpstart theeconomy.”

The current low interest environment of 0% to .25% also comeswith its own risks, the analyst said. Without consumer demand, theFed has little reason to amass so much liquidity and park it inreserves. Asset bubbles, such as those affecting first the dot.comindustry and then the housing industry, can and do burst, leadingto their own financial problems. Continued low rates are not anall-encompassing strategy, the analyst said.

“Maintaining the policy is not without its risks,” McBride said.“The Fed's best ideas were all used up years ago and they don'thave the justification to reel in all that liquidity.”

Moreover, McBride worries that both consumers and financialinstitutions have been spoiled by years of low interest rates andaccess to “free” money. Planning for the inevitability of risingrates is something that both consumers and their financialinstitutions can and should have been doing.

“Consumers should pay off variable-rate loans and credit cardsand refinance home equity lines of credit and adjustable ratesmortgages,” McBride said. “Investors should favor short-term overlong-term bonds and focus on asset quality in making theirinvestment decisions.”

Most financial institutions have been preparing for theinevitable for months, McBride added. How consumers who are membersand customers of those institutions respond is the unknownvariable.

“We're still in a slow-growth environment,” McBride said. “Beprepared and take steps now to mitigate the risk of risingrates.”