Fed Leaves Rates Unchanged, Citing Overseas Threats to U.S. Growth

Posted By on June 23, 2010

So now they tell us…….hasn’t this been ongoing for some time?

 
By CHRISTINE HAUSER

Published: June 23, 2010

The Federal Reserve’s policy-making arm said on Wednesday that it had decided to keep short-term interest rates near zero for “an extended period” in light of continuing threats to economic growth, including “developments abroad.”

The announcement by the Federal Open Market Committee was released at the end of its two-day meeting.

The Fed’s decision to stick with its low-interest-rate policy was in line with what analysts had expected, taking into account the pressures on consumer spending, an unemployment rate of 9.7 percent and other conditions that factor into the pace of the economic recovery.

There are also concerns, especially in equity and credit markets, that the European debt crisis could worsen, affecting the health of the global economy. This was reflected in the Fed’s statement, which said: “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”

The Fed said it continued to anticipate that economic conditions, “including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”

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