Fed Keeps Rates Low

But central bank sees hope amid slow recovery
By Newser Editors and Wire Services
Posted Dec 16, 2009 2:10 PM CST
Fed Keeps Rates Low
In this Dec. 7 file photo, Federal Reserve Chairman Ben Bernanke is introduced before speaking during a discussion hosted by The Economic Club of Washington.   (AP Photo/Haraz N. Ghanbari, File)

(Newser) – The Federal Reserve has decided to hold interest rates at a record low and pledged to keep them there for an "extended period" to keep the recovery going and drive down double-digit unemployment. But in a more upbeat assessment, the Fed says the US economy has "continued to pick up" and that "deterioration in the labor market is abating," a nod to the recent slowdown in the pace of layoffs.

Despite the improvements, Fed Chairman Ben Bernanke and his colleagues said there's still reason for caution. Spending by households, while growing at a moderate pace, remains "constrained" by the weak job market, slight wage growth, and tight credit. Against this backdrop, the Fed kept its target range for its bank lending rate at zero to 0.25 percent, where it has stood since last December. And it repeated its pledge, first made in March, to keep rates at "exceptionally low levels" for an "extended period." (Read more Federal Reserve stories.)

Get breaking news in your inbox.
What you need to know, as soon as we know it.
Sign up
We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.