Fed to Keep Historically Low Interest rates until late 2014

By | January 25, 2012

In a Wednesday press release, the Federal Reserve announced that it would be keeping historically low interest rates until late 2014 due to a slowing recovery.

Citing that while consumers are spending at an accelerated rate, business investment has reversed trends and gone lower, the Federal reserve feels that the move is necessary.

Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable.

The Fed funds rate has been and will remain at 0 to 0.25% for the foreseeable future which is a negative change from the fed’s previous expectation that rates would increase by the end of this year.

 

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