News / Economy

US Central Bank Sees Low Interest Rates Through 2014

Specialist Tina Vlitas watches the rate decision of the Federal Reserve as she works on the floor of the New York Stock Exchange, January 25, 2012.
Specialist Tina Vlitas watches the rate decision of the Federal Reserve as she works on the floor of the New York Stock Exchange, January 25, 2012.

The U.S. central bank says it will keep its benchmark interest rate near zero at least until late 2014, a new move to try to spark the sluggish growth of the world's largest economy.

The Federal Reserve had previously said it would keep its key lending rate low through mid-2013.  But on Wednesday, officials lengthened the low-interest period, saying they expect that economic growth over the next several three-month segments will be modest, and that the nation's 8.5 percent unemployment rate "will decline only gradually."

The U.S. economy has slowly regained strength in the prolonged aftermath of the country's recession from 2007 to 2009, America's worst in seven decades.  But even with some recent favorable economic trends, Federal Reserve Chairman Ben Bernanke said officials are not "ready to declare we've entered a new, stronger phase."

Some private economic analysts have predicted that the country's economy could advance by as much as 3 percent in 2012. But Bernanke said central bank officials are projecting growth of 2.2 to 2.7 percent this year, down from their November projection of 2.5 to 2.9 percent.  The central bank chief said officials think the national economy will gradually advance to a range of between 3.3 and 4 percent in 2014.

He described the U.S. jobless rate as "elevated," but said it could fall further to 8.2 percent this year, and to a range of 6.7 to 7.6 percent by late 2014.  Bernanke said central bank officials have set a 2 percent inflation target rate for the U.S. and that it could fall in the 1.4-to-1.8-percent range this year.

U.S. economic officials have regularly voiced their disappointment that their efforts to spur the American economy have not boosted it as fast as they would like.  Bernanke said the Federal Reserve would not hesitate to take further action if the country continues to "have this unsatisfactory situation."

Even with its vast economy, the U.S. could be sharply affected by the governmental debt crisis in Europe, one of its largest trading partners, and the slowing world economy.  The International Monetary Fund (IMF) this week slashed its 2012 projection for the growth of the global economy from 4 to 3.3 percent.

U.S. employers added 200,000 new jobs in December, and consumer spending has picked up somewhat.  But about 13 million workers remain unemployed, with millions more working part-time or at jobs they consider beneath their skills.

The state of the nation's economy, including the unemployment rate and the creation of more jobs, has become the key issue in this year's presidential election campaign as U.S. President Barack Obama seeks a second four-year term.  The two leading Republican presidential contenders - one-time venture capitalist Mitt Romney and former House of Representatives Speaker Newt Gingrich - have both regularly criticized Obama's oversight of the national economy.  They are vying to become the Republican nominee to oppose the Democratic president in November's national election.

The central bank's key interest rate is the one that banks use to lend each other money overnight when they need more funds. The Federal Reserve has set the target for the rate at zero to a quarter of a percentage point since December 2008, during the worst of the U.S. economic downturn.  The rate does not control consumer and business lending rates in the country, but helps influence what banks charge their customers.

The central bank said the country's economic conditions "are likely to warrant" the continuation of the low benchmark rate for the extended period.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Americans Celebrate Thanksgiving

Feasts centering on turkeys with an array of traditional sides and desserts are part of the holiday's traditions, which falls on the fourth Thursday in November More

Video For Obama, Ferguson Violence is a Personal Issue

With two years left in term, analysts say, president has less to lose by taking conversation on race further More

Video Italian Espresso Expands Into Space

When Italian astronaut Samantha Cristoforetti headed for the ISS, her countrymen worried how she would survive six months drinking only instant coffee More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Community Kicks Off Thanksgiving With Paradei
X
Anush Avetisyan
November 26, 2014 10:57 PM
Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video US Community Kicks Off Thanksgiving With Parade

Thursday is Thanksgiving in the United States, a holiday whose roots go back to the country's earliest days as a British colony. One way Americans celebrate the occasion is with parades. Anush Avetisyan takes us to one such event on the day before Thanksgiving near Washington, where a community's diversity is on display. Joy Wagner narrates
Video

Video For Obama, Ferguson Violence is a Personal Issue

Throughout the crisis in Ferguson, Missouri, President Barack Obama has urged calm, restraint and respect for the rule of law. But the events in Ferguson have prompted him to call — more openly than he has before — for profound changes to end the racism and distrust that he believes still exists between whites and blacks in the United States. VOA White House correspondent Luis Ramirez reports.
Video

Video Online Magazine Gets Kids Discussing Big Questions

Teen culture in America is often criticized for being superficial. But an online magazine has been encouraging some teenagers to explore deeper issues, and rewarding their efforts. VOA religion reporter Jerome Socolovsky went to this year’s Kidspirit awards ceremony in New York.
Video

Video Aung San Suu Kyi: Myanmar Opposition to Keep Pushing for Constitutional Change

Myanmar opposition leader Aung San Suu Kyi says she and her supporters will continue pushing to amend a constitutional clause that bars her from running for president next year. VOA's Than Lwin Htun reports from the capital Naypyitaw in this report narrated by Colin Lovett.
Video

Video Mali Attempts to Shut Down Ebola Transmission Chain

Senegal and Nigeria were able to stop small Ebola outbreaks by closely monitoring those who had contact with the sick person and quickly isolating anyone with symptoms. Mali is now scrambling to do the same. VOA’s Anne Look reports from Mali on what the country is doing to shut down the chain of transmission.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8016
JPY
USD
117.76
GBP
USD
0.6340
CAD
USD
1.1268
INR
USD
61.850

Rates may not be current.