No New News On Interest Rates, Fed Says

As expected, the Federal Reserve left interest rates near zero this afternoon, announcing that it is keeping its federal funds rate target between zero to 0.25%.

The Fed repeated that it "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period," but added economic activity in key areas such as consumers spending and housing is picking up.

Interest rates remain far below historic levels as the effects of the global recession continue to be felt and governments pump unprecendented amounts of money into the financial system. With unemployment still rising and tenuous recent economic growth that isn't likely to change soon.

The risk is governments could be creating hard-to-tame inflation or other financial bubbles if they get their remedies wrong and stimulate the economy too much.



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