Forex Blog

December 16, 2009

Fed Affirms Interest Rate Pledge

The Federal Reserve wrapped up its meeting in Washington today with a pledge to keep interest rates “exceptionally low” for an “extended period of time”. As such, the Fed voted to maintain the benchmark overnight lending rate between banks in a range of zero to 0.25 percent.

The Fed also released a statement noting that inflation will “remain subdued for some time” but overall, the economy is strengthening.

US Federal Reserve Fed

US Federal Reserve

“Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit,” the Federal Open Market Committee said in a statement today after meeting in Washington. “Businesses are still cutting back on fixed investment” and “remain reluctant to add to payrolls.” Deterioration in the labor market is “abating.”

Bloomberg

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