Fed to Keep Low Interest Rates by Milota Sidorova

American Federal reserve has announced it was extending the period of zero and near zero loan rates. The decision came based on facts it was a necessity although the job market was getting firm (at least was doing somehow better than in January 2010), the housing sector was weakening and generally the economy needed the push. This was not a real news last days.Well, for observer it is a really interesting watch to see FED leading into crisis with no warning, no forecast. During past 24 months it lowered rates, but it was only profiting business for banks – if the average bank company manage to get the money for 0.25 percent and then borrow for 8 percent to the custome! r, one see it couldn't go wrong. The profit is assured from the beginning.This time, even more than before the crisis banks are controlling the debt of American people. They encourage them to make mortgages, although the real-estate prices are falling, increasing number of properties are obliged to execution. The banking policy is encouraging public to take loans and spend more – so far, Americans showed some portion of caution for consumer spending. The major association hangs with increasing unemployment and dumb atmosphere. But in general frame, the picture hasn't changed – as soon as Job Department reports better numbers, the markets are rising and investors are making money. Banks are one of this kind. Fed announced it prolonged the period also because of rising consumer spending.Analysts forecast Fed would raise the federal funds before the end of this year. It is meeting in November and the increase to 0.5 percent is highly expected to be approved there.
related story (sgx16785): http://news.yahoo.com/s/nm/20100316/bs_nm/us_usa_fed;_ylt=Ak...

by Milota Sidorova for Cantell TV (http://cantell.tv)

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