By Angelo Orlando Jr.The Federal Reserve announced that the future economic outlook of the United States will be bleak. The Fed released that the gross domestic product of the US is likely to flatten out for the rest of the year in 2009 and to start off slow at the beginning of next year. This news came to the surprise of many because of the optimism of policy makers. They believed that, “the second half of this year and that the economy would grow between 2.5% and 3.3% in 2010. The central bank had also projected in January that unemployment would peak at 8.5% to 8.8% this year and fall to a range of 8% to 8.3% in 2010.” But many policy makers believed that the economic woes will continue and that the economy will remain slow into 2010. The Federal Reserve also stated concerns for deflation and sought out ways to solve the financial problem. One solution is to buy long term treasury bills and buy mortgage backed securities. The Fed decided to buy up $300 billion in long term t-notes and to also buy up to $750 billion in mortgage backed securities. The Treasury and mortgage purchases helped bring down interest rates, including mortgage rates, and helped feed a rally in U.S. stocks.
No comments:
Post a Comment