Fed: Rates To Remain Low Into 2014
January 26, 2012 by Sam Rolley
The Federal Reserve issued a statement on Wednesday saying that the economy of the United States has experienced moderate growth, despite slowing global economic growth, since the central bank’s Federal Open Market Committee met last month.
The Fed says that it will keep interest rates at a record low to “foster growth” of the moderately improving economy. The rates have been kept near zero for three years and will likely not be raised until late 2014.
The Fed statement says:
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
According to Financial Times, the Fed decision suggests that the Federal Open Market Committee wants to do all it can via communications policy to bolster investment before considering another round of quantitative easing, which Fed Chairman Ben Bernanke has not left off the table.
The central bank says it believes that one of the biggest threats to economic growth in the United States is the European financial crisis.