Fed Maintains Efforts to Stimulate Economy


The U.S. Federal Reserve has been trying to boost economic growth with a program of purchasing $85 billion a month in securities.  The program is intended to reduce long-term interest rates, which would make it easier for companies to buy new equipment and for families to buy new homes.
Fed officials also have been trying to speed up economic growth by pushing short-term interest rates down to almost zero.  Bernanke said the Fed will keep short-term rates at record lows for some time.
The Fed has to strike a careful balance in stimulus efforts.  If it cuts back too soon, the world’s largest economy could fall back into recession.  If it overstimulates the economy, the Fed raises the risk that inflation could cause serious problems.

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