The Fed left the base interest rate

The Fed made a fateful decision

In brief: The base interest rate remained unchanged. Fed's Bernanke listened and did what should have been.

Basic interest rate in the U.S. has become topic number one. Preserving 9 votes to 1, in accordance with the consensus forecast, the basic interest rate in the target range of 0% -0.25%, the Federal Open Market Committee Federal Reserve when it commented on its decision and the current situation in the country:

Fed notes continued economic recovery, a gradual improvement in labor markets, increases in consumer spending remains limited by high unemployment, low income growth and difficulties in obtaining credit. The volume of new housing are at a depressed level. The Fed noted that firms have significantly increased spending on equipment and software products, without increasing the cost of capital construction, and extremely reluctant to expand payrolls. The Fed believes that the financial conditions become less conducive to economic growth in relation to world events. The volume of bank lending in recent months continued to decline. Nevertheless, the Fed is counting on a gradual return to higher levels of financial resources in the context of price stability, despite the fact that the pace of economic recovery is likely to be more moderate for some time.

The Fed monitors a reduction of prices on commodities and raw materials and energy resources in recent months, leading to a reduction in core inflation. In the absence of price pressure cost of basic resources and in terms of stable long-term inflation expectations can be assumed that the inflation for some time will remain at low levels. The Fed maintains a range of 0% -0.25% interest rate for federal funds and expects that economic conditions, including low level of financial resources, low inflationary pressures and stable inflation expectations would probably ensure exceptionally low base interest rate over a long period. The Fed will continue to monitor the economic outlook and developments in financial markets and will, as appropriate, to use their funds to support economic recovery and price stability.

Ukrainian Globalist
2010-06-23 22:20, Economics.

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