Ben there done that

21 September 2010 By Martin Hutchinson

Continued nearzero interest rates and the additional monetary stimulus hinted at by the Fed are meant to nurse sluggish growth. But the policy risks encouraging bad lending and corporate investment decisions. America s competitive capital edge looks increasingly threatened.

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Federal Open Market Committee meeting Sept. 21 maintained its federal funds rate target at 00.25 percent and its policy of reinvesting the proceeds of maturing federal agency debt, but made two significant changes in the wording of its statement.

First, it stated that measures of inflation are currently at levels below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability.

Second, the FOMC said it was prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

The National Bureau of Economic Research said Sept. 20 that the recession ended in June 2009 after a duration of 18 months.

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Second, the FOMC said it was prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

The National Bureau of Economic Research said Sept. 20 that the recession ended in June 2009 after a duration of 18 months.

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