The Federal Reserve announced on Wednesday it would not change the benchmark interest rate, keeping it low until at least 2014, due to anticipated high unemployment.
"The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate," the Federal Open Market Committee said in a statement.
"To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy."
Read more at GlobalPost: Federal Reserve leaves US rates unchanged
The Fed will keep short-term interest rates near zero, indicating it doesn’t expect the economy to complete its recovery since the 2008 crisis in the next three years. Holding the rates near zero could speed up the process of recovery by reducing the cost of borrowing, The New York Times reported.
“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” the Fed said. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”
The Fed will release its quarterly economic forecast Wednesday afternoon, which will include the predictions of the 17-member committee about what they plan to do to end the Fed’s three-year-old policy of holding short-term interest rates close to zero, the Associated Press reported.
The announcement made on Wednesday after the meeting didn’t include any new Fed actions to try to lift the economy, which was expected, the AP reported. The Fed did say it will continue to buy and sell securities in its portfolio so the average maturity of those securities is longer-term.
Read more at GlobalPost: The Federal Reserve proposes new banking rules tomorrow