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How long can the Federal Reserve keep interest rates low

By Edited Jun 8, 2015 1 3

The Federal Reserve reported that the U.S. economy continues to strengthen, but the people left unemployed by the recession are still so high that it expects interest rates to remain near zero for an extended period . At the end of its two-day meeting, the arm of the central bank responsible for setting monetary policy noted that the labor market is beginning to improve but added that high unemployment is limiting consumer spending.

"The information received from the Open Market Committee of the Fed meeting in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve," the FOMC said in a statement. Following its March meeting, the FOMC indicated that the labor market was "stabilizing." The Fed suggested on Wednesday that it is in no hurry to tighten monetary policy, reiterating its forecast that the jobless economic resources, low inflation and inflation expectations are stable enough to justify that rates should remain at record lows during "a period prolonged. "

To give itself more flexibility, the Fed has recently indicated that there is no limit specified for the extended period. " It all depends on how recovery occurs this ties in with what the swing trading for dummies system explians. The latest economic figures show that the economy continues to recover, but at a gradual rate so that inflation is not a risk.

The Fed noted that consumer spending had "recently increased, but remained constrained by stagnant incomes, credit restrictions and high unemployment. The central bank reiterated that inflation is likely to "be moderate for some time."

At its meeting, FOMC members also discussed ways of reducing the central bank's portfolio of over U.S. $ 1 billion in asset-backed securities without damaging the economic recovery. Some officials favor a prompt start to sales which could impact financial stocks in a day trading for dummies system , but the chairman of the Fed, Ben Bernanke, seems to have adopted a more cautious stance.

The statement merely reiterated Wednesday that the Fed will continue to monitor the economy and financial markets and remains ready to buy or sell assets as necessary. However, the minutes of the FOMC meeting, to be published on May 19, may show an intensification of the debate inside the central bank about the need for the entity to sell assets.



Apr 30, 2010 1:06am
Good information, and an very nicely written.
May 4, 2010 1:00pm
Thanks, glad you enjoyed it.
Mar 15, 2015 12:59pm
Well done!
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