Wednesday, June 23, 2010

Fed To Keep Rates Low To Support Weak Recovery

The federal reserved resumed a two-day meeting today to discuss their optimism in the counties economic recovery, as well as fears for a possible relapse. According to, experts are expecting that interest rates will remain low to support the struggling economy.

The Fed resumed its two-day meeting Wednesday with policymakers having cause for optimism as well as caution. The economy has been growing again for nearly a year. Manufacturing activity is picking up. Businesses are spending more. And Fed Chairman Ben Bernanke has expressed confidence that the nation won't fall back into a "double dip" recession.

At the same time, the recovery remains vulnerable to threats: Europe's debt crisis, an edgy Wall Street, cautious consumers, a fragile housing market and high unemployment.

"The effect of European developments on the U.S. economy is likely to be modest, so we expect the tone will be cautious but certainly not dire," said Michael Feroli, economist at JPMorgan Chase (JPM - news - people ) Bank.

The Fed is certain to leave its key bank lending rate at between zero and 0.25 percent. An afternoon announcement is expected. The rate has remained at that level since December 2008.

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