WASHINGTON -On Tuesday the Federal Reserve said it likely would keep its key interest rates at historically low levels for two years since the U.S. economy is weaker than it thought and that the outlook remains bleak.
So let the Fed thinks its policy rate close to zero until mid-2013, while it has been there since December 2008.
The policymakers of the U.S. central bank said the economy grew at a rate “considerably slower” than the institution had anticipated and that temporary factors such as high energy prices and the Japanese crisis, were responsible for only “part of the recent weakness” of economic activity.
Specifying the dates, the Fed hopes to calm investors, who know well that they should receive a rate credit extremely advantageous for at least a year older than many economists had expected.
Financial markets have dropped after the announcement, however, may be disappointed that the Fed has not decided to launch a new buyback program of U.S. debt.