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MONDAY, NOVEMBER 23, 2009
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Fed Keeps Interest Rates at Record Low

Economy picking up, but not enough that inflation is a worry

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(AP) – The Federal Reserve says the recession is easing, but that the economy likely will remain weak and keep a lid on inflation. Against this backdrop, the Fed held a key bank lending rate at a record low of between 0% and 0.25%, and pledged again to keep it there for "an extended period" to help brace activity going forward.

Even though energy and other commodity prices have risen recently, the Fed said inflation will remain "subdued for some time." This new language sought to ease Wall Street's concerns the Fed's aggressive actions to revive the economy will spur inflation later on. The Fed also decided to stay the course on existing programs intended to drive down rates on mortgages and other consumer debt.

Chart shows key interest rates for European Central Bank, Bank of England and US Federal Reserve
Chart shows key interest rates for European Central Bank, Bank of England and US Federal Reserve
Japanese shares sagged yesterday after losses overnight on Wall Street while investors awaited fresh cues on the economy from the Fed's upcoming policy meeting.
Japanese shares sagged yesterday after losses overnight on Wall Street while investors awaited fresh cues on the economy from the Fed's upcoming policy meeting.   (AP Photo/Shizuo Kambayashi)
Federal Reserve Chairman Ben Bernanke is seen in the East Room of the White House in Washington last week.
Federal Reserve Chairman Ben Bernanke is seen in the East Room of the White House in Washington last week.   (AP Photo/Pablo Martinez Monsivais, FILE)
Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill, June 3, 2009.
Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill, June 3, 2009.   (AP Photo)
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Altoecko
Jun 25, 09 12:34 AM CDT
I'm a little worried about how high inflation is gonna be. I'm hoping it'll peak out at around 8 to 12 % as the current trends would suggest, but I won't rule out 40 - 45% is possible. Reply
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