US Fed keeps interest rates on hold

| March 16, 2011 | 0 Comments

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

Interest rates have been held at this historic low for two years.

In a statement, the central bank said that the economic recovery is on “firmer footing” and the jobs market is “improving gradually.”

Meanwhile, it said it will press ahead with its $600 billion stimulus programme until the end of June.

The FOMC also acknowledged the recent surge in commodity prices but said inflation expectations remained “stable” over the long-term.

However, surging oil prices could pose a danger to economic growth in the US, Fed chairman, Ben Bernanke, recently warned.

Meanwhile, another challenge for the US economy has been stubbornly high unemployment.

However, earlier this month it was revealed the unemployment rate in the US fell from 9% in January to 8.9% in February.

It represented the third consecutive month that the rate has fallen with the economy creating 192,000 jobs in the month – far better than expectations.

Tags: Federal Open Market Committee, , FOMC, , , , , ,

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