Fed: Unlikely To Raise Interest Rates Before 2014

The Federal Reserve plans to keep short-term interest rates near zero until 2014, about 18 months longer then planned. Rates have already been low for several years, and there's much debate about the benefits and costs of the Fed's policies — including the message it sends that the economy's recovery is slower than expected.

The Federal Reserve plans to keep short-term interest rates near zero until 2014, about 18 months longer then planned. Rates have already been low for several years, and there's much debate about the benefits and costs of the Fed's policies — including the message it sends that the economy's recovery is slower than expected.

The Federal Reserve Board's Open Market Committee said Wednesday that it will not raise interest rates. The Fed plans to keep interest rates exceptionally low "for an extended period of time" to help the recovery. But the statement also said the central bankers are encouraged by the stronger economic outlook. "Conditions in financial markets have improved further in recent weeks," it said. "Household spending has continued to show signs of stabilizing but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit."

Ben Bernanke tells Congress the Federal Reserve is sticking with its plan to hold interest rates at record-low levels until at least late 2014, despite a pickup in hiring that's steadily lowered the unemployment rate.» E-Mail This     » Add to Del.icio.us

WASHINGTON (Reuters) - The Federal Reserve may need to raise official interest rates before late 2014, Richmond Fed President Jeffrey Lacker said on Friday, justifying his dissent against the central bank's latest decision. The Fed left its monetary policy on hold this week, but sent a strong signal that it was considering another round of bond purchases if recent economic weakness persists. Policymakers also reiterated their view that the Fed's benchmark overnight interest rate, currently near zero, would stay at those rock bottom lows until at least late 2014. ...

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