News / Economy

    US Central Bank to Hold Interest Rates Low

    A television screen at the post of specialist Stephen Ruiz, left, displays the decision of the Federal Reserve, on the floor of the New York Stock Exchange Tuesday, Aug. 9, 2011.
    A television screen at the post of specialist Stephen Ruiz, left, displays the decision of the Federal Reserve, on the floor of the New York Stock Exchange Tuesday, Aug. 9, 2011.

    Multimedia

    Michael Bowman

    The U.S. central bank says America’s economic recovery has slowed, and that near-zero interest rates are expected to remain in place for another year. The statement from Federal Reserve policymakers came after a U.S. credit rating downgrade and significant losses on global financial markets.

    If nervous investors were looking for swift, aggressive action from the Federal Reserve in response to the U.S. credit rating downgrade, lagging economic growth, and upheaval in financial markets, Tuesday’s meeting of Fed policymakers gave them little to cheer about.

    With interest rates already at historic lows, the U.S. central bank announced no interest rate or policy changes, nor any new rounds of monetary infusions. That, despite noting what the Fed termed heightened “downside” risks to an economic recovery that many economists believe is stalling.

    Even so, the Federal Reserve did not rule out future action, saying its Open Market Committee discussed a “range of policy tools available to promote a stronger economic recovery.”

    Bank of New York Mellon global financial strategist Jack Malvey said, “I think they [Federal Reserve officials] would prefer to see the markets try and reach equilibrium on their own," said Malvey. "This [market upheaval] really is not [a repeat of the financial crisis of] 2008. This is a response to an overload of negative factors over the course of the last couple of weeks. And it does provide some basis for optimism and not-too-distant [market] stabilization.”

    Malvey appeared on Bloomberg Television. He said market fears of another recession in the United States have eclipsed those stemming from Standard & Poor’s downgrade of U.S. creditworthiness. “The chances of a recession in the U.S. are probably up in the 50-percent category [range]. In many respects, the [S&P] downgrade was no big deal. It was in recognition of what was fairly obvious over the last year, that the U.S. fiscal position is not as strong as it had been," he said.

    A slowing U.S. economy will exacerbate America’s fiscal imbalances. Yet a $1.5 trillion deficit gives the federal government little room to stimulate growth. Given these realities, the Obama administration is advocating short-term measures to spur job growth and consumer activity while also urging long-term efforts to cut the deficit and slow the growth of the national debt.

    Gene Sperling, who heads President Barack Obama’s National Economic Council, also appeared on Bloomberg Television. “We need to do both the short-term and the long-term. And the best thing we can have is that we are willing to take aggressive bipartisan action on job growth in the short-term, in the same context in which we are also signaling that we are going to get control of our long-term fiscal situation," he said.

    Sperling said the administration wants to see an extension of a temporary cut in taxes paid by workers to fund Social Security, thereby giving wage earners higher take-home pay. Monday, President Obama renewed his call for a bipartisan formula to reduce America’s debt burden. Washington’s lack of progress in confronting America’s fiscal challenges was listed as a primary factor in Standard & Poor’s decision to cut the U.S. credit rating last week.

    Related story by VOA's Mil Arcega

    You May Like

    Mother of IS Supporter: Son Was Peaceful, 'Role Model'

    Somali-American Abdirizak Mohamed Warsame pleaded guilty Thursday to charges of conspiring to provide material support to Islamic State militants

    Factions Shift as Civilians Die in Syrian War

    Scenario likely only to further confuse military situation on ground and potentially worsen humanitarian crisis that already has grown to epic proportions

    Presidential Hopefuls Woo Minorities, Evangelicals

    Four GOP candidates to speak at forum at Bob Jones University in Greenville, South Carolina

    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.
    Two-thirds of World Faces Water Shortagei
    X
    February 12, 2016 7:31 PM
    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video Two-thirds of World Faces Water Shortage

    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video Gateway to Mecca: Historical Old Jeddah

    Local leader Sami Nawar's family has been in the Old City of Jeddah for hundreds of years and takes us on a tour of this ancient route to Mecca, also believed to be the final resting place of Adam's wife, Eve.
    Video

    Video New Technology Aims to Bring Election Transparency to Uganda

    A team of recent graduates from Uganda’s Makerere University has created a mobile application designed to help monitor elections and expose possible rigging. The developers say the app, called E-Poll, will make Uganda's democratic process fairer. From Kampala, VOA's Serginho Roosblad reports.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video Russia Bristles at NATO Expansion in E. Europe

    Russian Foreign Minister Sergei Lavrov is meeting Friday with the head of NATO after the Western military alliance and the United States announced plans for the biggest military build-up in Europe since the Cold War. Russia has called NATO's moves a threat to stability in Europe. But NATO says the troop rotations and equipment are aimed at reassuring allies concerned about Russia as VOA's Daniel Schearf reports from Moscow.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.

    World Currencies

    EUR
    USD
    0.8869
    JPY
    USD
    112.70
    GBP
    USD
    0.6894
    CAD
    USD
    1.3922
    INR
    USD
    68.241

    Rates may not be current.