Tuesday, February 14, 2012
Bernanke Holds to 2014 Low-Rate Vow Even as Unemployment Falls
This article (link here) talks about Fed Chairman Ben Bernanke's pledge to keep borrowing costs close to zero at least through late 2014. This is interesting considering the unemployment rate fell to a 3 year low. Bernanke has been criticized for his pessimism about the labor market. Take a look at the article. Do you think the Fed should continue its policy of near-zero borrowing costs despite the economy showing signs of recovery?
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This is a great article. The Fed has a huge impact on our economy and Bernanke's speeches alone can have a visible impact on the markets. I agree that borrowing rates should be close to zero, though. I personally do not look at it this as his pessimism in the labor markets but rather his encouragement to banks to stay active and keep pumping money into the economy. We have already been through QE1 and QE2 and now its time to let it all play out.
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