Donald Kohn: Fed To Keep Interest Rates Near Zero

CNBC:

The U.S. Federal Reserve is likely to keep benchmark interest rates near zero for a while in an economy that is pulling out of a steep decline and appears on course for a very gradual recovery, Fed Vice Chairman Donald Kohn said Saturday.

Read the whole story: CNBC

Comments

[LunaPark]

12:48 PM on 05/24/2009

There are 179 cosponsors of HR 1207 (Federal Reserve Transparency Act), and there is a companion bill in the Senate S 604 (Federal Reserve Sunshine Act). Both of these bills are doomed to either fail outright, or get watered down to be nothing more than a toothless show. The power bankers are going to do everything they can to derail these bills. The Fed system fuels senseless war and shackles the poor, the working class, and the elderly on fixed income with the bill by using inflationary measures. If you are a true Progressive, you'll call your representatives and demand that they support these bills.

[Name Not In Use]

02:23 AM on 05/24/2009

Are they issuing VISA cards at that rate?

[DiogenesOfAlaska]

08:59 AM on 05/24/2009

I'm afraid you wouldn't even want that to happen. Of course current rates are basically usury. But to provide credit regardless of the ability to pay it back has ... um ... its own dangers.

[watchTVgetSTUPID]

01:00 AM on 05/24/2009

In other words, inflation will make gas hit $4 a gallon again. No recovery.

[mikep]

04:34 PM on 05/24/2009

Yep, gas up 40 cents a gallon in Los Angeles over the past month. But it won't stop at $4/gallon this time. Not with the kind of deficits Obama's running. It'll be at least $5-6 by the end of 2010, if not sooner.

These statements that they can't raise interest rates until the economy improves are really frightening. They have it backwards: There's no real possibility of the economy improving until interest rates rise. Nobody is going to invest in the US if they can only expect 1% return on their money. That's absurd. Not when there are so many countries out there that have avoided debt and are experiencing growth, have competent people running their economies and can offer genuine returns on investments. All low interest rates can do is bring about the kind of stagnation that Japan's experiencing. Totally disastrous.

[MuchMadness]

11:48 PM on 05/25/2009

We should have had a higher federal gas tax a long time ago to make sure that gasoline would not be too cheap. The revenue could have been used to improve our infrastructure and make us economically more competitive in the long run. Instead, our government allowed the energy companies to reap obscene profits and not do much for the good of America.

[vagabondvet]

10:37 PM on 05/23/2009

Ridiculous. These guys also updated their 2009 estimates this week for a sharper contraction in the US than they previously expected. The Fed is a sham and fails at all their monetary policy goals. It is a semi-private organization that uses our tax money and doesn't have to tell us where it goes. Support HR 1207 and urge your Representatives to do the same.

[sonofsamphm1c]

08:03 AM on 05/24/2009

They are a sham because they don't have a crystal ball?

We live on a globe. Point out an economy that is run according to your notions. I do not think people would sit still for it.

[vagabondvet]

09:47 AM on 05/24/2009

People would not sit still for accountability of their tax dollars by a semi-private central bank?

Crystal ball not necessary. http://www.youtube.com/watch?v=2I0QN-FYkpw