Fed Keeps Rates Unchanged

August 13th, 2009 | Economy, Mortgage

U.S Government is trying their very best to give comfort to their citizens and but keeping the rates unchanged could be a major reason of failure of their attempts. In The U.S Fed is a part of US Federal Reserve system and a back bone Organization in US. This organization is a major authority of making the policies and rules related to the countries financial and economical decisions. The unchanged rate was no surprise to the markets which had placed the probability of a rate change at nearly 0% as indicated by the Fed Funds Futures price action. In a statement Fed said “it’s a leveling out” in economic activity and indicated that substantial resource which is slowed down in commodities and have to keep inflation down. The Fed did say, however, it expects the economy to remain weak for a time. The Federal Reserve on Wednesday kept its key interest rate near 0% as estimated and it would end its purchase of $300 million in Treasury securities in October, one month later than previously announced. The Fed is expected to maintain the current rate between 0 and 0.25 percent.

The Federal Funds Rate is that rate at which banks lend their Federal Reserve balances to each other. The unchanged rates has affected the stock market as well world stock markets shot higher Thursday after the US Federal Reserve said the world’s largest economy appeared to be “leveling out” from its worst recession in decades. So, it’s very much clear that now there is much need of change the rates of banks and so that economy can go up and people get relax!