The Real Deal New York

Fed continues easing, says rates will remain low until unemployment, inflation targets are met

December 12, 2012 02:00PM

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The Federal Reserve today pledged to keep interest rates low until unemployment falls below 6.5 percent and inflation reaches 2.5 percent, CNBC reported. This means the Federal Reserve may be pumping funds into the economy, a practice known as quantitative easing, indefinitely, as employment rates have stubbornly remained mostly stagnant in the last four years, CNBC said.

This move, which was expected, brings the Fed’s total injection for 2013 to around $1 trillion in 2013, and $4 trillion overall.

“Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative,” the Board of Governors of the Federal Reserve System said in a statement today.

Stocks rose and interest rates fell slightly — the intended consequence — when the statement was made, according to CNBC. [CNBC] –Guelda Voien

 

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