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22nd of December 2010
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December 15, 2010    

US Fed keeps interest rates on hold

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by Kay Murchie

The Federal Reserve’s policy-setting arm, the FOMC, elected to keep interest rates on hold between 0% and 0.25% - a move which was widely expected.

The Federal Open Market Committee also reaffirmed its commitment to buy $600 million in Government bonds - a policy which was branded “QE2“ (quantitative easing) and designed to boost the economy.

The biggest hurdle facing the Federal Reserve currently is the rising unemployment rate – which climbed 0.2% last month to 9.8%.

The rate has now exceeded the 9% mark since May 2009 - the longest period of time on record.

The US economy added just 39,000 in November – far below forecasts of 130,000 jobs and significantly less than the 172,000 jobs created in October.

The unemployment figures continue to raise fears for the strength of the US economic recovery.

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