Fed Moves to Stimulate Sluggish Economic Recovery
Fed Vows to Keep Interest Rates at Record Low Levels…
The Federal Reserve Board scaled back its expectations for the economy Tuesday, vowing to keep interest rates at record low levels and taking a small measure to stimulate a recovery that has lost steam.
The Fed said it will reinvest proceeds from mortgage and other debt that it owns in longer-term Treasury debt. Economists said the measure could stimulate some borrowing by lowering long-term interest rates.
But interest rates have been at or near record lows for months and have failed to achieve the kind of strong recovery most economists would have expected given the severity of the recession that began in December 2007.
“It’s been a half-speed recovery at best,” said PNC Bank chief economist Stuart Hoffman.
He called the Fed’s decision to reinvest proceeds from its debt portfolio “a subtle change.” Some economists argue the Fed should provide a stronger stimulus by purchasing more debt.
Full article: Fed Moves to Stimulate Sluggish Economic Recovery
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Tags: Federal Reserve Board, PNC Bank, Stuart Hoffman, Treasury
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