Depressed housing sector and job scarcity prompt move to keep rates at near-zero level
The U.S. Federal Reserve announced Wednesday that it will hold off on raising interest rates for another 18 months, extending the period of near-zero rates until late 2014. The move is an indication that the American central bank is reluctant to move away from policies enacted in reponse to the 2008 economic recession, when it started lowering interest rates to encourage spending, borrowing and investment. In making the statement, the Fed pointed to the country’s depressed housing sector and job scarcity. It also expressed concern over Europe’s sovereign debt crisis, which EU leaders are still grappling to address, the New York Times reported.