Federal Reserve Plans To Keep Interest Rates Low For Months

They're doing everything they can to stimulate the economy.
We had modest GDP growth last quarter. Home sales are down, however. The federal deficit is booming. The dollar is dropping. Oil prices are around $80 a barrel. Gold is hitting all-time highs.

The Los Angeles Times reports:

Federal Reserve policymakers stayed with the status quo today, saying in their post-meeting statement that they expected to keep short-term interest rates low "for an extended period."

That had been the big mystery surrounding the Fed’s meeting — whether Chairman Ben S. Bernanke and peers would feel compelled to signal that the improving economy would lead to tighter credit sooner rather than later.

By retaining the "extended period" pledge, the Fed is offering no incentive for markets to push up short-term rates on their own.

One change of note in the statement: The Fed will pare back on purchases of bonds issued by mortgage giants Fannie Mae and Freddie Mac, citing "the limited availability" of such debt. The change doesn’t affect the Fed’s larger purchase program of mortgage-backed securities, which is the direct way it is attempting to keep mortgage rates down.