Tags: US | Fed | Interest | Rates

Fed Holds Rates at Record Lows to Foster Recovery

Tuesday, 16 Mar 2010 02:19 PM

 


The Federal Reserve repeats its pledge to hold interest rates at record lows to foster the economic recovery and ease high unemployment.

But its decision draws one dissent. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, for the second meeting in a row opposes keeping the yearlong pledge.

The tension illustrates the Fed's challenge in deciding when to signal that higher rates are coming. Hoenig thinks the economy is strong enough for the Fed to telegraph that rates will rise soon to prevent inflation. But the others think the low rates will continue to be needed to feed the economic recovery.



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