Fed To Keep Interest Rates Low Through 2014
The central bank doesn't predict significant economic growth before then.
| Posted Wednesday, Jan. 25, 2012, at 2:46 PM ET
Photograph by Karen Bleier/AFP/Getty Images.
While an enthusiastic Barack Obama touted the nation's job growth and promising manufacturing industry in Tuesday’s State of the Union, it looks like the Federal Reserve isn’t quite as optimistic.
The Fed announced Wednesday that it will keep interest rates around zero until 2014, a decision that revealed it doesn't believe that the anemic economy will be recovering anytime soon.
Bloomberg reports that while the Fed recognized the 200,000 added jobs in December, it also pointed out a lack of business investing and a weak housing market. "The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually,” said a statement by the Federal Open Market Committee.
Low interest rates have been the central bank’s longest-running response to the financial crisis, the New York Times explains, and bank officials hope to rev up the economy by keeping the cost of borrowing down.
