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Fed Leaves Rates Alone amid Signs the Recession is Easing

Noting that the economic outlook has improved and the recession is easing, the Federal Reserve kept the federal funds rate at a record low of between zero and 0.25% and decided against taking any new steps to shore up the economy. The Fed said aggressive action already taken - including a $1.2 trillion injection in March - should help bolster economic activity, although it left the door open to future action if needed. Back in March, the Fed said it would start buying government debt - $300 billion over the next six months - and would buy an additional $850 billion worth of mortgage-backed securities and debt from mortgage giants Fannie Mae and Freddie Mac. The Fed added that the economic outlook has "improved modestly" since the March meeting, but that "economic activity is likely to remain weak for a time.” While consumer spending has stabilized, it is still being hampered by rising unemployment, falling home values and tight credit, it said.

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Date Last Updated: 05/07/2009