PLEDGE NOW
Here and Now with Robin Young and Jeremy Hobson
Public radio's live
midday news program
With sponsorship from
Mathworks - Accelerating the pace of engineering and science
Accelerating the pace
of engineering and science
Wednesday, October 29, 2014

Fed Keeps Rate At Record Low, Ends Bond Buying

Federal Reserve Chair Janet Yellen is pictured  testifying before the House Financial Services Committee on July 16, 2014. (Mandel Ngan/AFP/Getty Images)

Federal Reserve Chair Janet Yellen is pictured testifying before the House Financial Services Committee on July 16, 2014. (Mandel Ngan/AFP/Getty Images)

The Federal Reserve plans to keep a key interest rate at a record low to support a U.S. job market that’s improving but still isn’t fully healthy and help lift inflation from unusually low levels. As expected, it’s also ending a bond purchase program that was intended to keep long-term rates low.

The Fed on Wednesday reiterated its plan to maintain its benchmark short-term rate near zero “for a considerable time.” Most economists predict that the Fed won’t raise that rate before mid-2015. The Fed’s benchmark rate affects the rates on many consumer and business loans.

In a statement ending a policy meeting, the Fed suggested that the job market, though still not back to normal, is strengthening. The statement drops a previous reference to “significant” in referring to an “underutilization” of available workers. Instead, the Fed said that the underutilization of labor resources is “gradually diminishing.” The Fed also said that labor market conditions had improved further with “solid job gains and a lower unemployment rate.”

The change indicates that the Fed believes the labor market, while not completely restored following the Great Recession, is at least in better shape. One of the Fed’s major goals is to achieve maximum employment, which it currently defines as an unemployment rate between 5.2 percent and 5.5 percent. The unemployment rate in September fell to 5.9 percent.

Guest


Please follow our community rules when engaging in comment discussion on this site.
Robin and Jeremy

Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

May 24 19 Comments

Remembering A Forgotten Scandal At Yale

Mark Oppenheimer was surprised to find how the scandal impacted those involved, almost 60 years later.

May 24 9 Comments

Arizona’s ‘Adopt-A-Burro’ Program Tries To Solve An Overpopulation Issue

The small donkeys are federally protected animals, but cause problems like digging up plants and walking on highways.

May 23 33 Comments

The Politics Of Home Ownership

Author Brian McCabe finds that our belief about home ownership as a way to improve civic life doesn't necessarily pan out

May 23 15 Comments

How Political Cartoonists Are Watching The Presidential Campaign

For cartoonists Marshall Ramsey, Darrin Bell and Gary Varvel, it's been a mixture of hilarity and sadness.