Recessionomics

Fed Will Hold Interest Rate Low

The Federal Reserve reiterated Wednesday that the worst of the recession is over and that economy is on the road to recovery—but it still isn't exactly brimming with confidence. The interest rate will remain "exceptionally low" for an "extended period," Fed officials said. Bloomberg reports that the low interest rate—between 0 and .25 percent—is an effort to encourage lending and reduce the unemployment rate that is still hovering close to 10 percent. Stocks rose on the largely optimistic news. One long-term issue concerning economists is how the Fed will prevent inflation as the economic recovery gains steam.