Ben Bernanke and Friends Press Their Bet On Low Rates
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As expected, the Federal Reserve pledged today to keep interest rates at "exceptionally low levels" for an "extended period" as the economy continues to recover.
The Fed did acknowledge the promising data recently that signals the recession has ended and the economy is turning to the positive at a two-day policy meeting for Fed Chairman Ben Bernanke and his colleagues.
The Fed sees bright-spots in the better-than-expected November jobs report and GDP growth.
Bernanke still sees problems with the recovery, which is forcing Fed into keep rates at the exceptional low level of zero to 0.25 for the foreseeable future. The roadblocks for the recovery continue to be weak consumer spending, the high unemployment rate, slow wage growth and tight credit being available.
The Federal Open Market Committee voted 10-0 to keep the rates at the current historically low levels.
"Information received since the FOMC met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating," said the central bank in a released statement. The fed also confirmed that their special liquidity facilities will expire on February 1, 2010.
The announcement comes as no surprise to anyone in the financial market as Bernanke said last week that the slack in the economy and subdued inflation would allow the central bank from raising the rates unless emergency measures call for it.
The worries are apparent that when the government backed stimulus packages go away for good next year, can the economic recovery show itself as being self-sustaining.
"The Fed seems fairly determined based on the data that they are looking at to keep rates exceptionally low for longer," John Stoltzfus, Director and Senior Market Strategist at Ticonderoga Securities told StreetInsider.com.
Stoltzfus iterated that the Fed is continuing to worry about the potential obstacles that lie ahead of the recovery, specifically when they mention the weak job market; however they are quick to point out how the slowing rate of job losses in November was a sign of positivity.
"We continue to live in an environment where we're getting a lessening of the worsening," said Stoltzfus. He also sees potential for the government to use the funds saved from the TARP to possibly pump money into the economy to stimulate more consumer spending or job creation.
Fed Chairman Ben Bernanke was not only the man of the day today, but he was also named 'Man of the Year' by Time magazine.
The Fed did acknowledge the promising data recently that signals the recession has ended and the economy is turning to the positive at a two-day policy meeting for Fed Chairman Ben Bernanke and his colleagues.
The Fed sees bright-spots in the better-than-expected November jobs report and GDP growth.
Bernanke still sees problems with the recovery, which is forcing Fed into keep rates at the exceptional low level of zero to 0.25 for the foreseeable future. The roadblocks for the recovery continue to be weak consumer spending, the high unemployment rate, slow wage growth and tight credit being available.
The Federal Open Market Committee voted 10-0 to keep the rates at the current historically low levels.
"Information received since the FOMC met in November suggests that economic activity has continued to pick up and that the deterioration in the labor market is abating," said the central bank in a released statement. The fed also confirmed that their special liquidity facilities will expire on February 1, 2010.
The announcement comes as no surprise to anyone in the financial market as Bernanke said last week that the slack in the economy and subdued inflation would allow the central bank from raising the rates unless emergency measures call for it.
The worries are apparent that when the government backed stimulus packages go away for good next year, can the economic recovery show itself as being self-sustaining.
"The Fed seems fairly determined based on the data that they are looking at to keep rates exceptionally low for longer," John Stoltzfus, Director and Senior Market Strategist at Ticonderoga Securities told StreetInsider.com.
Stoltzfus iterated that the Fed is continuing to worry about the potential obstacles that lie ahead of the recovery, specifically when they mention the weak job market; however they are quick to point out how the slowing rate of job losses in November was a sign of positivity.
"We continue to live in an environment where we're getting a lessening of the worsening," said Stoltzfus. He also sees potential for the government to use the funds saved from the TARP to possibly pump money into the economy to stimulate more consumer spending or job creation.
Fed Chairman Ben Bernanke was not only the man of the day today, but he was also named 'Man of the Year' by Time magazine.
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