Fed to Keep Rates Low for ‘Extended Period’

The article mainly talks about the fact that the Fed keeps the interest rate low since job growth and other economic indicators remain weak. To be specific, the feds fund rate has been around 0-0.25 percent since 2008, which is historically low. As the Federal Open Market Committee points out, household spending only grows at a moderate rate, because it is constrained by high unemployment, slow income growth and tight credit. Although spending on software and equipment has risen significantly, investment in nonresidential structures is declining. Since the interest rate cannot go any lower, it might be helpful that the Fed can come up with any other monetary policies to stimulate economic growth. The main tools which have been used by the Fed are buying enormous sums of assets and mortgage-backed securities.