Fed to Keep a Lid on Rates Through 2014
The Federal Reserve lent weight to economists’ warnings of a long and slow recovery on Wednesday when it announced plans to keep short-term interest rates near zero for at least the next three years. The idea is that low rates will encourage borrowing and investment in American businesses, helping resurrect the economy.
The Federal Reserve lent weight to economists’ warnings of a long and slow recovery on Wednesday when it announced plans to keep short-term interest rates near zero for at least the next three years. The idea is that low rates will encourage borrowing and investment in American businesses, helping resurrect the economy. –ARK
Your support matters…The New York Times:
The decision means that the Fed does not expect the economy to complete its recovery from the 2008 crisis over the next three years. By holding rates near zero, the Fed hopes to hasten that process somewhat by reducing the cost of borrowing.
“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” the Fed said in a statement released after a two-day meeting of its policy-making committee. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”
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Market forces are colliding as another U.S. financial crisis brews. Meanwhile, sit tight on the roller coaster.
The September/October issue of Foreign Affairs features an article titled “Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.” It’s the sort of thing normally heard only from money reformers and Social Credit enthusiasts far from the mainstream. What’s going on?
"Hundreds of pages of transcripts, based on recordings made at the time, reveal the ignorance of Fed officials about economic conditions during the climactic months of the financial crisis," The New York Times reports.
Congress has the power to amend the Fed -- just as it did in 1934, 1958 and 2010. For the central bank to satisfy its mandate to promote full employment and become an institution that serves all the people -- not just the 1% -- the Fed needs fundamental reform.
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