EconBriefs

United States: No rate hike

The US Federal Reserve has pledged to maintain interest rates near zero for extended period. In a statement, the Federal Open Market Committee (FOMC) explained that businesses were still cutting back on fixed investment and staffing, though at a slower pace. The FOMC said household spending appeared to be expanding, but remained constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit, hence Fed chairman Ben S Bernanke was trying to determine when the recovery would be strong enough to withdraw from the stimulus plans. This showed that the despite the country’s economy registering growth in the third quarter, growth alone would not be enough to warrant a tighter policy.