Federal Reserve To Keep Rates Low [AUDIO/VIDEO]
The Federal Reserve says the economy is getting better, but keeping interest rates low will continue to be on the menu for the economic recovery.
In the after-statement behind their latest two-day meeting, Ben Bernanke and company said housing and hiring continue to improve. They also predict moderate growth this year after a pause in 2012.
Longer term inflation expectation also remained stable, meaning prices for most things should not start to zoom up anytime soon.
“It’s a good environment,” says Rider University Economist Maury Randall.
The Fed also cautioned that unemployment will remain above 6.5 percent for two more years, so low interest rates will also stay for now. Randall says this double-edged sword will make it easy to borrow money, but savers will suffer low returns.
As for Wall Street, “The markets are quite pleased and they welcome what Bernanke had to say.”
The Fed also expressed concern about the effect of federal spending cuts and tax increases.