Fed Keeps Rates Low, adds to stimulus

Fed Keeps Rates Low, adds to stimulus Zeebiz Bureau

Washington: Aiming to bolster the employment rate in the US, the Federal Reserve kept interest rates steady on Wednesday.

Announcing a new round of monetary stimulus, Fed indicated that interest rates would remain near zero until unemployment falls to at least 6.5 percent.

It was the latest in a series of unorthodox measures taken by central banks around the world to battle erratic, sub-par recoveries from the financial crisis and recession of 2007-2009.

The Fed expects to hold rates steady until its new threshold on unemployment was reached as long as inflation does not threaten to break above 2.5 percent and inflation expectations are contained. It also replaced an expiring stimulus program with a fresh round of Treasury debt purchases.

The central bank previously said it expected to hold rates near zero through at least mid-2015, but policymakers were uncomfortable making a pledge based on the calendar rather than the economic goals they hope to achieve.

With Agency Inputs