The Federal Reserve has pledged that it is going to keep the benchmark interest at a record low until the middle of the year 2013 in order to push forward the country’s recovery that has been “considerably slower” than expected. Chairman Ben S. Bernanke have made this pledge after studying information and figures showing that the United States economy is slowing down due to the unexpected downgrade from Standard & Poor.
The Federal Open Market Committee said that they are “prepared to employ” extra measures in order to put the economy to its rightful place amidst the weak figures of unemployment and lackluster household spending.
Three members of the committee were not too enthusiastic about the announcement because they prefer having low rates for an “extended period” rather than having a specific timeframe.
Stocks have rebounded and yields on 10 year Treasury notes were on a record low following the announcement from the Federal Reserve.
This is the biggest effort from the Federal reserve since November as the United States government is trying their best in order to save the economy and boost figures.
According to the Federal Reserve, “Economic growth so far this year has been considerably slower than the committee had expected. We expect a somewhat slower pace of recovery over coming quarters. The downside risks to the economic outlook have increased.”
Spending cuts and other measures on the August 2 agreement signed by President Barack Obama will be acted upon by next year and ease up until 2013.
Tags: 10 year treasury, Standard & Poor's, Ben Bernanke, household spending, specific timeframe, united states economy
