Sunday, January 31, 2010
Fed vows low rates for ‘extended period’
This article talks about why the Fed will continue to keep interest rates low. It says that although the economy has started recovering, it is doing so at a slow pace, hence it still has a long way to go. It also talks about how the Fed has to be carefull in pulling out the stimulus money without significantly affecting the economy.
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With the U.S. economy on the mend, the main goal of the Fed this year is to decide when to pull back the stimulus money given to bail us out of the financial crisis. Fed Chairman Ben Bernanke was recently elected to another four-year term. The Senate voted on his confirmation on Thursday. Bernanke's term would have expired Jan. 31.
ReplyDeleteits not surprising that they are deciding to keep rates low but at some point they are going to need to hike the rates back up to encourage change. i think that a smart way to go about this is if they announce a long term plan to slowly raise the rates so that people will go out and rush to buy houses and cars before they get stuck with high interest rates. also if our interest rates go up, other countries will be encouraged to invest and save with our banks because it will yield higher returns to whoever does.
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