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DAVID GREENE, host: It's MORNING EDITION from NPR News. Good morning. I'm David Greene.

STEVE INSKEEP, host: And Steve Inskeep. If you think of the supply of money like a faucet, the Federal Reserve has had one goal since the financial crisis started. The Fed has steadily opened that faucet wider, hoping to keep the money flowing.

GREENE: It was toward that end that the Fed made another move yesterday. Having promised to keep short-term interest rates very low for two years, the Fed made a move to push down long-term rates. In general, that should make it cheaper to borrow, but the move will affect millions of different people in different ways.

INSKEEP: NPR's Scott Horsley reports on the implications for borrowers, savers and people still looking for work.

SCOTT HORSLEY: With the White House and Congress at loggerheads over how best to help the U.S. economy, some have pinned their hopes on the Federal Reserve to help fill the void. Fed Chairman Ben Bernanke says the central bank still has a range of tools it can use to prop up the economy. But Greg McBride of the financial website Bankrate.com is not holding his breath.

GREG MCBRIDE: The Fed can only do so much. Their most effective tools are things that they have used up already. And at this point they've got a few options left, but none of them is a surefire way to either jumpstart the economy or to get people to borrow or get banks to lend. There's still a demand problem, and that is not something that the Fed alone can fix.

HORSLEY: The Fed used its primary tool long ago, pushing short-term interest rates about as low as they can go. That's why you can find a car loan for less than three percent, for example, at lenders like the Oshkosh Community Credit Union.

KATHY STEINER: We're located downtown Oshkosh, but we do have a lot of members outside of the city.

HORSLEY: Loan officer Kathy Steiner says even with all the cheap money available, people are still hesitant when it comes to borrowing for a new car.

STEINER: They are not out there just buying a vehicle 'cause they think it's pretty. They think it through: Do I really need this new car, or should we just get the other one fixed? If you can get another couple years out of it for $500, you'll do it.

HORSLEY: That same kind of caution may limit any positive impact from the Fed's latest effort to lower long-term interest rates. University of Oregon economist Mark Thoma says cheap business loans don't help much if companies are too nervous to take on additional debt.

MARK THOMA: You can lead the firm to water, but you can't make them drink it. When you lower interest rates, that creates an incentive. But there's no guarantee that a firm is going to act on the incentive. And one of the problems the Fed faces right now is getting firms to actually, you know, bite when they lower the interest rates.

HORSLEY: Meanwhile, the Fed's effort to make life easier for borrowers is creating all sorts of headaches for savers. Sally Inman and her late husband socked most of their life savings into certificates of deposit when they retired. They were counting on the interest to help cover expenses when they quit working and moved to Mesa, Arizona.

SALLY INMAN: When we first started, we were getting, oh, probably five, 5.25 percent. It was really good. Now it's like .1, if we're lucky. You earn smidgens of $2 here or $4 there. And it's very, very difficult.

HORSLEY: Inman says she's not about to gamble with her money by putting it into the stock market. But the 69-year-old says she's worried about how long her savings can hold out.

INMAN: If I'm like my grandmother, she died just before her 100th birthday. Longevity is in the family. So I have got to make this last. And it scares me.

HORSLEY: The Fed has long been faced with competing goals of keeping prices steady and fighting unemployment, so it's often caught in a kind of tug of war. Top Republicans have accused the central bank of doing too much to goose the economy at the risk of triggering inflation. Some Fed policymakers who share that view dissented from yesterday's action. But economist Thoma does not believe the Fed is being overly aggressive.

THOMA: From my perspective, the Fed really hasn't put enough effort into job creation. They really ought to respond stronger to the job creation part, the unemployment part, than they have so far in this crisis.

HORSLEY: Thoma says he's less worried about the price of groceries going up a bit than he is about people who have no paycheck to buy groceries at all. Scott Horsley, NPR News, Washington.

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