Fed says it will hold rates fast until mid-2013

Fed says it will hold rates fast until mid-2013

www.msnbc.msn.com

The Federal Reserve sketched a dim outlook for the economy Tuesday, suggesting it will remain weak for two more years. As a result, the Fed said it expects to keep its key interest rate near zero through mid-2013.

It's the first time the Fed has pegged its "exceptionally low" rates to a specific date. The Fed had previously said only that it would keep its key rate at record lows for "an extended period."

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I can already tell what this announcement is doing. I have been watching the currency exchange rates drop as the market is picking up steam again.

This is an unusual move by the Fed tacking on a specific date. It is a little artificial but perhaps necessary move. Just wondering the consequences. For me it caused me to lose something in currency exchange while it is necessary for me to convert dollars to pesos.

www.msnbc.msn.com
(visit the link for the full news article)

On the bright side inflation will keep on rising. I thought the downside of losing triple a was the increase in interest?

Interesting.......

I'm not extremely well versed in economic theory, but isn't this a good thing as it will add stability to the market because people don't have to worry about interest rates changing (until late 2013 that is)?

People have one year left to pay down their debts before interest rates kill them.

That's the gist of it, I think.