Federal Reserve in an effort to monitor the performance of the US economy for a longer term has not increased the rate of interest keeping them at historic lows for a longer period to come. This decision was arrived sighting that it is not the right time to embark on exit strategies as the economic activity has picked up in the housing and financial markets. The announcement by Federal Reserve resulted in the surge in the stock market as the prices soared but the stock market ended at a days low in closure as the dollar was losing it value continuously.The Government would restrain from doing any thing to prevent the weakening of the dollar, as it would help in Exports, as the domestic consumption is still weak.Economists feel that the Fed is likely to hold the interest rate close to 0 to .25% even in 2010 and some expect it to remain unchanged till 2011. The Fed officials also have expressed concern that the longest recession since World War II would result in slow economic recovery.
Fed officials and economists were all confident that the economy has reached a point where the inflation would stay under control for a long time period. Employers have come to a point where the rate of job cuts and reduction in the investment have reduced when compared to the previous months.We would experience a steady economic recovery as federal reserve continues to lend a supporting hand which is much required as consumer debt keeps on mounting. Unemployment is reaching an all time high at the end of first quarter as the business cut on their fixed investment in an attempt to bring down the cost involved. It is likely that Fed programs are essential to help supporting the economy in this period when jobs dry up in the market.Unemployment rate has reached a all time high in the last 26 years irrespective of the fact that the number job cuts were much lesser then those in the preceding months. The Government is positive that there would be increase in the rate of employment for the year 2010 lead by the increase in part time jobs. Powered by Freedom debt Relief
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October 30, 2009 at 12:06 pm |
Thanks to the Federal Reserve officials, their decision to lend their support for a longer period is indeed a positive move for economic recovery.