Fed holds rates at record low to fuel recovery

Washington comPost ^ | 12/16/2009 | JEANNINE AVERSA

[markomalley]

The Federal Reserve has decided to hold interest rates at a record low and pledged to keep them there for an "extended period" to keep the recovery going and drive down double-digit unemployment.

But in a more upbeat assessment, the Fed says the economy has "continued to pick up" and that "deterioration in the labor market is abating," a nod to the recent slowdown in the pace of layoffs.

Despite some improvements, Fed Chairman Ben Bernanke and his colleagues said there's still reason for caution. Spending by households, while growing at a moderate pace, remains "constrained" by the weak job market, slight wage growth and tight credit, Fed policymakers said.

Against this backdrop, the Fed kept its target range for its bank lending rate at zero to 0.25 percent, where it's stood since last December. And it repeated its pledge, first made in March, to keep rates at "exceptionally low levels" for an "extended period."

[markomalley]

So that means the value of the dollar will continue to shrink. Great.

[refermech]

And they are effectively giving all the banks interest free loans payed for by? (who do you think)

[sickoflibs]

Watch gasoline prices!

[svcw]

Well, spur the economy. LOL
My husband and I tried to get a home loan (second home). Credit scores over 825, 20% down, a job. We were denied. Why? Because he changed jobs. Thirty years at one job but did not have six months of pay stubs at the new job. Huh!

[griswold3]

Think on the bright side....

Pretty soon you won’t need a loan, that 20% down could cover the full price!

[Brad from Tennessee]

As recovery expands much of the money in bonds, money markets, precious metals, lock boxes, etc. could flood back into the economy in a rush for bargains. The Fed is supposed to start reeling in all the extra dollars it has printed. However there will be pressure from various quarters to keep interest rates low.

[andy58-in-nh]

The banks get interest-free loans but charge you 30% on your credit card while pretending that the assets they own are still worth what they were in 2007. Oh yeah: this will end well...

[GOPJ]

Thomas Jefferson 1802:

Banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.

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Thought you’d like that...

[sickoflibs]

I need to save that one! Thanks