(Image Source: The Telegraph)
BY DAVID EARL
ANCHOR CHRISTINA HARTMAN
Fed chairmen are famously mum about economic issues, but in a rare press conference Wednesday, Ben Bernanke laid out the Federal Reserve’s plan for the next few years. Bloomberg was there...
“Economic conditions are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014...”
In addition to the announcement of low rates through 2014, the Fed also issued an inflation target of 2 percent. The average US inflation rate for 2011 was just more than 3 percent.
“A higher inflation rate would reduce the public’s ability to make accurate longer term economic and financial decisions … where as a lower inflation rate would be associated with an elevated probability of falling in to deflation.”
Previous estimates on the Fed’s action had rates staying low through 2013 … now, with rates remaining low through an additional year, CNN Money explains how it will impact consumers.
“Keeping it at historic lows, as the Fed has done since 2008, is meant to stimulate spending by lowering interest rates on everything from mortgages to car and student loans.”
JP Morgan’s chief US economist gives his reaction to the announcement on Fox Business....
“So this is actually a little more on the accommodate side than we were expecting … and so once again, Bernanke, continuing to surprise us on how focused he is on getting growth going again.”
Global financial firm PIMCO founder Bill Gross told CNBC he’s a fan of how open the Fed has become...
“It’s gonna give the credit markets the most transparent scan of the feds brain that it has ever had.”
A Wall Street Journal reporter says the top investment firms think it’s about time...
“Is this a step that will make for better central banking? Better monetary policy making? They think it is and other central banks have done it and have had a fair amount of success with it.”
The Fed announcement sent stocks higher Wednesday. The DOW closed up 83 points, the NASDAQ gained 31, and the S&P climbed 11.
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