Well, it looks like it’s one down, three to go for the Federal Reserve as, today, they promised to keep short-term interest rates freakishly low for at least the next two years (and possibly much longer) while holding in reserve three other options – changing their mix of assets to lower long term rates (which doesn’t appear to be necessary at the moment), spurring banks to lend by paying less on excess reserves, and, of course, the big kahuna of about a trillion dollars more in Treasury purchases, otherwise known as “QE3″.
By promising to keep rates low “at least through mid-2013″ in the policy statement released earlier today, the central bank assured the nation’s big banks of continuing to make big profits for the next two years on the interest rate spreads.
Of course, this will continue to punish the nation’s savers who, for the foreseeable future, will be looking at rates of one percent or less for certificates of deposit.
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