by Don Lee
The Federal Reserve today left interest rates near zero and said that the economy, while on more stable footing, was likely to remain weak for some time.
The Fed gave no indication that, despite improving signs in the economy, it was considering imminent hikes in the key federal funds rate, the rate banks charge one another for overnight loans. Policymakers at the central bank voted 10-0 to maintain the rate between zero and 0.25%, where it has been since December, and reiterated that it would likely keep it there for "an extended period."
"They're nowhere close to thinking about an exit strategy or raising rates," said Alan Levenson, chief economist at T. Rowe Price in Baltimore.
The Fed reiterated that given the considerable resource slack, or unused capacity, in the economy, it expects inflation "will remain subdued for some time."
There were no other changes disclosed to the Fed's previously announced programs to buy various debts, including $1.25 trillion of agency mortgage-backed securities.
In its one-page release, the Fed, as expected, gave a slightly more optimistic assessment of the economy since the monetary policy committee last met in late June. The committee said this time that "economic activity is leveling out," as opposed to its previous statement that economic contraction was slowing.
Still, the Fed noted that household spending remained constrained by job losses, lower housing wealth, tight credit and sluggish income growth.
Comments
What is going on, the Fed said our economy is beginning an upturn !! How can that be ?? There is a Democratic President, a Democratic Congress and they aren't supposed to know what they are doing. Well, I guess that is another one the Republicans/Libertarians got wrong, dead wrong !! Now, if we can only get them to change their minds about a government-sponsored healthcare option, our country would really turn it around. Come on, you good Americans, Republicans and Libertarians, join us, Democrats, and tell these sleazy Healthcare Corps to leave our medical delivery system alone. Quit gouging the sick, the bedridden and the elderly. Give healthcare back to the doctors and nurses, not to your accountants and your bureaucratic workers.
SUPPORT OUR TROOPS, BRING THEM HOME, ALIVE AND WHOLE. NOW.
Posted by: Don Fitzgerald, IL | August 12, 2009 10:35 PM
All the signs of an economy that will go on a 73 month long expansion? I doubt it
Posted by: Terry | August 12, 2009 10:55 PM
All the signs of an economy that will go on a 73 month long expansion? I doubt it
Posted by: Terry | August 12, 2009 10:55 PM
Hopefully we won't have another massive, uncontrolled bubble economy fed by un regulated Wall Street greed leading to another devastating economic collapse like we had under the Bush Administration economic policies. We can't afford a devastating 'success" like that again.
Posted by: Cassie | August 13, 2009 5:30 PM
Cassie,
Trust me, with these statists in charge, I wouldn't worry about the values of any assets becoming over-inflated.
I would hate to have those 73 months of economic growth, low interest rates, and low inflation. As far as the recession, if the flatliners (that's democrats to you newbies) hadn't legilslated that banks make loans to people that couldn't afford them. We'll see if we can keep Barney Frank and Chris Dodd away from the mortgage industry.
Posted by: Terry | August 13, 2009 7:13 PM
Cassie and Don "Asleep Under the Viaduct" FITZ,
Don't throw your parade yet.
http://finance.yahoo.com/news/Retail-sales-dip-unexpectedly-apf-1948834182.html?x=0
Posted by: Terry | August 13, 2009 7:28 PM