The Federal Reserve is doing its best to do nothing.
That's the quiescent word out of Washington, D.C. today, as Ben Bernanke and team said they would leave US interest rates at "exceptionally low levels at least through late 2014.”
While noting some improvement in the overall labor market, the Fed gang pointed to a still-high unemployment rate, as well as the weak housing market and slowing business investment.
So it'll try to keep things going in the world's largest economy, by keeping rates low.
Here's the money quote, pulled from the latest Federal Open Market Committee notes:
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. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
But, as usual, I prefer my economic arguments in easy-to-digest rap form.