Economy is Leveling Out, Rates to Remain Low; FED

The recession appears to be ending, says the Federal Reserve. The Fed delivered a vote of confidence on Wednesday, after continuing to hold the overnight rate at a record low of 0.0-0.25%. They also pledged to keep them there for “an extended period” with the anticipation to nurture the anticipated recovery. The Fed Chairmen, Ben Bernanke, gave encouraging signs that the economy seems to be leveling out.

The Fed will slow the pace of buying US treasuries. Since announcing the program to help encourage lending, and stimulate the economy, the Fed’s program was intended to buy up to $300 Billion of US treasuries. So far, they have bought $253 Billion, leaving $47 Billion left to go by their announced end date of October 2009.

The US Federal Reserve is on track to continue to be the largest mortgage holder, through their program of buying up to $1.25 Trillion worth of mortgage securties issued through Fannie Mae and Freddie Mac. Their purchases have totaled $543 Billion so far, showing they still have fire power to help keep rates low.

Prime rate also will stay near 3.25%, continuing to be the lowest in decades.

[Source: Assocaitated Press]