Fed pledges low rates for two years

09/08/11 20:57 CET

economy

| |

Federal Reserve Chairman Ben Bernanke and his fellow policymakers have kept interest rates unchanged in the US and committed to keeping them low for at least two years.

The financial world was looking to him to do something to boost the weak US economy and Wall Street didn’t seem too cheered and shares trimmed their earlier gains.

The problem for the Fed is that it has just about run out of options.

It has already mounted one of the most aggressive central bank easy money campaigns in history.

Interest rates were cut to near zero in December 2008 and since then it has bought 2.3 trillion dollars worth of assets – like government bonds – to try to stimulate economic activity.

To buy more – which requires printing more money – risks pushing up inflation.

The Fed also revised downwards its economic forecast for the US.

More about: Federal Reserve, Interest rates, USA

| |

JavaScript is required in order to view this article’s accompanying video

Mali: Rebel groups agree to creation of Islamic state

Two Rebel groups have agreed to merge and create an independent Islamic state in Northern Mali. After seizing Azawad – an area larger than France – two months ago, the groups had initially disagreed, with the secular Movement for the Liberation of Azawad (MNLA)…