Fed Sees Rates Staying Near Zero Through Late 2014

By BINYAMIN APPELBAUM
Published: January 25, 2012

WASHINGTON — The Federal Reserve said on Wednesday that it intended to hold short-term interest rates near zero “at least through late 2014,” extending its most basic and longest-running response to the financial crisis by at least another 18 months.

The decision means that the Fed does not expect the economy to complete its recovery from the 2008 crisis over the next three years. By holding rates near zero, the Fed hopes to hasten that process somewhat by reducing the cost of borrowing.

“While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated,” the Fed said in a statement released after a two-day meeting of its policy-making committee. “Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed.”

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