Ben Bernanke has intimated that actions to support the recovery are of prime importance, and that interest rates are likely to remain at their current low for the time being. Meanwhile, some skeptics are concerned that inflation may result from the Fed's current policies re the availability of money at an extremely low cost. Mr. Bernanke believes that slowed production and high unemployment will counteract any inflation. Any decisions reached regarding this matter should be made public late in the day on Wednesday.
Some bright spots on the horizon are appearing such as a slight decrease in unemployment, fewer laying off of employees and third quarter economic growth which may continue until the end of the year. Countering these optimistic signs are the continued lack of available jobs, reluctant buyers of goods and services and the fact that credit is extremely difficult to obtain.
While the Fed's rate of about a quarter % or less, the prime rate at about three and a quarter %, credit that is too difficult to get is extremely damaging to small businesses, thus reducing their ability to hire new employees and grow their businesses. Hopefully, the lenders will take President Obama's suggestion and ease the restrictions on small businesses. These low rates, while making credit attractive to those who can get it, really hurt those who have CD's, interest-bearing checking and savings accounts.
|
