The Federal Reserve Extends Historically Low Interest Rates: Is this Good News or Bad News for your Finances?
The Federal Reserve is extending the record low interest rates until 2014! While this may seem like good news for consumers and businesses looking to borrow money, it is bad news for many Americans who are counting on interest income to fund their retirements.
The Fed is responsible for predicting unemployment rates, inflation and economic growth and using that data to help set the interest rates. The federal funds rate will remain unchanged, staying at a record low level through 2014 due to a lack of significant improvement in economic conditions. The Fed originally cut the federal funds rate to the current record low back in 2008 in an effort to stimulate the economy. The goal was to promote spending though, not saving, and not raising the rate is a reflection of the Fed's dismal economic outlook for the next two years. The Fed has even been blamed for slowing the recovery process because the lower interest rates have not improved conditions much over the last few years.
Tune in to this week's CBTV show this Friday at 4:00 PM EST to learn more about what the Fed's decision to extend historically low interest rates REALLY means and how it impacts your finances!
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