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Fed: Rates To Remain Low Into 2014

January 26, 2012 by  

Fed: Rates To Remain Low Into 2014

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.

 

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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  • Lastmanstanding

    So in the mean time, you are encouraged to borrow worthless money (That they will not lend you AND are inflating away to nothing) that they just print. It will however go to cronies who will use the worthless crap to purchase gold,silver and real estate so that when they crash the system that they will STILL remain in control…

    However, it’s not going to happen this time, the crooked bankers, fed and our disgraceful political class are on their way out…and they are realizing it.

    The NDAA was put in place by them to protect them from the people who are psisssed about their lack of performance.

    While they claim you have the op to borrow “money for damn near nothin” they will continue to offer you “nothing for saving it.” You could decide to play their manipulated paper market (AT HIGH RISK)where they WILL rob/steal what you have left FOR THE LAST TIME!!

    You had better get your money into things that you have in your possession…it is your last chance.

    • clarence swinney

      Yeh!
      Fed balance sheet
      8-08-08—869 Billion
      12-28-11–2929 Billion

      When will inflation hit us?

    • http://gillysrooms.blogspot.com GILLYSROOMS in Australia

      Lastmanstanding…Hate to disagree with you, but many corporations are borrowing money at 1% to buy up mining companies in Australia and Canada perhaps because they can make a killing in arbitage. Even Australias largest mining company BHP Billiton borrowed several US$Billions @ lower than our government can borrow at 4.25% to use for acquisition opportunities. I wish i could borrow at 1%pa because we have to pay about 7% to 10%pa for our money here in Australia..if you can get it, as most banks are not lending anyway or you need to be a multi millionaire to be even considered for a loan unless you want to buy a Kubota Tractor of course…lol

    • Sirian

      LMS,
      Sheeple keep accepting what they are told instead of watching the trick the other hand is sliding by. The magicians, the Fed and many others, are diligently playing us for suckers (we have been since 1913) while pleasurably at work to screw us out of all they possibly can.

  • Sirian

    Isn’t it somewhat unusual that the Fed will supposedly hold its interest rates in place until 2014. Hummm, what is supposed to kick into effect in 2014? OBAMACARE! Sure, taxes and other funding sources have already been manipulated into action but. . . So, doesn’t it seem somewhat odd how the timing of both such actions/programs are to come about during the same year? Now watch this hand while we really take care of what we want with the other. Magicians? Naw, they’d never do anything like that now would they?

  • James Lyons

    Bernanke like the rest of the White House gang working to keep interest rates very low are idiots. Don’t they understand that a lot of retirees have their money in safe investments such as CD’s and they spend the interest not the principle there fore not incoming interest no spending, no spending results in no buying which leads to manufacturing which leads to no JOBS. What a dumb ass.

    • Alex Frazier

      That’s the point. They DO understand that. But under the Keynesian model, hoarded money (i.e. savings) cause the wheels of the economic system to faulter. That’s why the system is designed to deliberately create inflation to put those idle funds to work.

      To create an interest scenario by which principle is being spent, they are getting their cake and eating it too. They are not paying out the interest, the inflation is eating up whatever the people don’t spend, and the lack of interest earnings force them to spend their principle.

      Whatever way you look at it, the government is getting their money. And that is ultimately the objective from the bank’s point of view.

  • Lynne

    Useless Fed … :/

  • steve in AZ

    “The central bank says it believes that one of the biggest threats to economic growth in the United States is the European financial crisis.”

    Next to Ron Paul, of course.

    DONATE NOW so we can VOTE RON PAUL 2012!!!

  • Sabulaman

    If the Fed would have raised rates slightly before the housing bubble burst, many people would not have chosen to buy a house that they could not afford. Furthermore less investment money would have been spent on stocks, and more would have remained in interest accounts through the crash. Interest rates have a dual purpose. It’s always worked in the past. Once again government intervention has created a substantial portion of the economic mess we are in, and the Fed is right in the middle of it.

    • http://gillysrooms.blogspot.com GILLYSROOMS in Australia

      Your absolutely right Sabulman. This exactly what our Australian Reserve Bank did to save us from a fate worse than yours. No only did they raise rates they even issued media releases warning people that interest rates were going to go a lot higher if they continued to buy up real estate and stockmarket securities. This alone worked so well, that it stopped spending in many areas and now they have dropped official interest rates twice in three months from 4.75% to 4.5% to 4.25 and maybe they might do it again next month. The only problem is that its not working to increase business activity because the banks have not always reduced rates and are actually de-gearing instead of recapitalising as required under new government regulations and thus we have a credit squeeze which in turn is affecting the value of their own bank securities. Its a very compex matter.

  • http://gillysrooms.blogspot.com GILLYSROOMS in Australia

    Federal Reserve issued a statement on Wednesday saying that the economy of the United States has experienced moderate growth? What a load of belone…the reality they are in a tight corner because they cant lower interest rates any lower than NIL and they have to feed this dribble to give people some hope, where there is little. Why cant they just admit and accept that most nations will be lucky to have zero growth and most will be in decline. Why not be thankful and accept the benefits of zero growth if you can get it.

  • jimbo

    So Obama and the Fed continue to pay off government debt with freshly inked paper, while the savings of Americans goes down the tubes due to inflation, and the prime rate is held artificially low, preventing savers and retirees from earning anything on their savings. Why aren’t people upset about this?

  • Marvin

    The only thing zero interest rates will do is create bubbles . The economy will stay down . Ron Paul is our only hope.

    • Alex Frazier

      The idea of 0% interest is to encourage investment. But we are no longer an in-house financing market. Companies function on credit. And the banks have no desire to loan out money at 0%.

      But as long as rates can be kept artificially at 0%, the collapse isn’t ready to happen. Interst rates will be the sign that the monetary and economic collapse is imminent. QE goes on as long as they are able to do it and get away with it. When faith is lost in a nation’s ability to meet its obligations, the lenders demand a larger return on their investment to offset the risk, and shorter terms. Presently, they have already moved to shorter term notes. When QE is no longer a sustainable prospect, interest rates will sky-rocket over night.

      When that happens, get rid of your paper. Put it into anything of tangible value you can. It’ll all be worthless in short order when the interest bomb hits.

  • Noink

    We have a natural, God-given right to our lives, our liberties, and fruits of our labor. Protecting those rights is the only role that government ought to have in a free society. – Representative Ron Paul, END THE FED, Page 210

  • Jay

    Oh, what compassion. The gift of of keeping interests low, on loaned-out toilet paper!

  • Alex Frazier

    As usual, Bernanke has but to open his mouth to start the market tumbling somewhere. Silver spiked almost a dollar and a half yesterday when he made his announcement, and the long awaited rally in gold, silver and platinum has started.

  • Jim

    What does Ben know that we don’t?

    A recent comment made by Josef Ackerman, CEO of Deutsche Bank on CNBC, that unemployment in Spain is running approximately 45%, Italy 30% and Greece 40%. These rates seem unimaginable. I have been unable to find anything close to these numbers in print on the internet. Makes we wonder what constitutes a depression if unemployment is at these high levels now in large parts of the EU.

    http://bit.ly/ycROfC

    comment is made at 4:20 of the video

  • PATRIOT 101

    Headline should be:

    World economy staggers, even with “Free Money”!

    Free money and Americans can only get it through the Channel of Food stamps or Welfare! Forget a small business loan! It would take longer to get approved for a small business loan than it took to overthrow several mid-east dictators and give those countries over to Islamic Radicals!!

  • Bud

    Maybe it would be helpful if this idiot opened his eyes (see picture) once in awhile

  • Truth Or Fantasy?

    Why are my savings accounts only getting cents on the dollar? In days past, the rates were decent, but now in the crapper. Why? That was how we saved and kept the economy going, by having money to spend.

  • s c

    People, did ANY of you take a serious look at that disgusting photo at the top of the article? The light over the Boob’s head almost looks like a halo.
    It might have been an accident, but a photographer did us a favor. It puts Bernanke’s role as wannabe money ‘saint’ in a different light.
    He’s a puppet, and he’s pulling strings just like the Boob’s bosses are pulling his. Redistribution of America’s wealth and slavery via an imploding dollar is his #1 assignment in life.
    If you can find a reason to look up to him (or if you believe a prez has any legal or moral right to appoint the head of a PRIVATE CORPORATION), you are about as ignorant as any mortal can be. Ben is killing America. THIS is what central banks do, people.
    Andrew Jackson got it right. He was the last president to understand central banks and he treated them like the scum they are. We need more Jacksons. North Korea can have Ben.

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