The Federal Reserve signals intent to continue low interest rates

Janet Yellen

The Federal Reserve reassured financial markets Wednesday that a key interest rate will stay near zero for “a considerable time” after its bond purchases end next month, deferring for now a clear signal on how it will begin to shift away from low-rate policies it’s had in place since the 2008 financial crisis.

In a statement following a two-day meeting, the Fed said it will continue to wind down monthly bond purchases that have held down long-term interest rates and end the program next month, assuming the labor market continues to improve.

Fed Chair Janet Yellen will further explain the Fed’s thinking at a press conference scheduled for 2:30 p.m. ET. Following the release of the statement at 2 p.m., the Dow Jones industrial average was up more than 40 points to 17,159 shortly before Yellen’s press conference.

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1 thought on “The Federal Reserve signals intent to continue low interest rates”

  1. What was that old expression from Mad Magazine. “What? Me Worry?” The photo does not do the comic character justice.
    What would make a whole lot more sense would be to put the interest rate on savings at a level that would attract world wide money into the United States.
    In order to break even that interest on savings would have to be at least 7-8%. To make it worth while, I suggest 11-12% return on the money.
    I am counting on 4.5% inflation minimum.
    Why would we do this? I suggest that under the current system there is no return on saving money. Any money you do have will be lost the first time you require hospital care. Other countries have put in national health insurance. Obamacare is one such attempt here. It won’t work as long as healthcare leaves the individual with no disposable income to work with.
    The economists have missed a vital point in making an economy work.
    There has to be enough disposable income in circulation for retailers to continue to make a profit.
    If that disposable income has been demolished by various factors then there will be a depression to end all depressions. And that basically is what I see happening.
    Wars generate profits for certain groups. They demolish the old establishment in favor of new people making fortunes. War is the only fly wheel big enough to turn a short term depression around.
    At least that is the theory from the Rand Corp. Report from Iron Mount from around 1969.
    I say that they have it all wrong. It bankrupts countries right and left.
    It is going to take a real genius to fix our economy. I don’t see any candidates that meet that requirement.
    Someone has to bring balance back into the system of labor. That is not happening any time soon.
    So bring on the crash.

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