U.S. Federal Reserve Open Market Committee Member William Poole Wednesday took the highly unusual step of specifying that the Fed will not raise interest rates at the Fed's next meeting in December.

In a speech delivered Wednesday at Marquette University, Poole, a voting member of the FOMC, said, "When the Fed cuts its target for the federal funds rate, market participants know that the FOMC's decision at its next meeting will be either to leave the rate unchanged or to cut further. Barring unusual circumstances, the FOMC would not consider a rate increase just after cutting its Fed Funds rate target."

Poole added: "This approach to policy is appropriate when market conditions are fragile because market participants must be confident that they can take positions without the risk that the Fed might raise rates, which would reduce asset values, in the near term. Investors can then concentrate on determining the fundamental value of risky assets and can work on deals to buy such assets from holders forced to sell by their own impaired liquidity and capital positions."

Fed Analysis: Fed Governor Poole's specific statement that the Fed would not cut interest rates at its next meeting is highly unusual, given the Federal Reserve's ability to influence both market and economic events via monetary policy. The Fed, usually led by the Chairman of the Federal Reserve, almost always uses opaque, highly-qualified language to both not signal its intentions and to not cause large, sudden changes in market valuations. Poole's specific language most likely is an attempt by the Fed to reassure the markets that, barring unusual circumstances, their will not be a "start / stop monetary policy" by the Fed -- i.e. beginning an interest rate reduction policy, then reversing it -- but rather, that the Fed's bias is toward lowering rates to promote stimulus to ensure adequate U.S. GDP growth, and counteract the negative effects of sub-prime mortgage and related bond defaults.