The Federal Reserve made a statement today to keep interest rates at record lows. The Fed has been buying $85 billion of Treasury and mortgage-backed bonds each month to support the U.S.’s struggling economy. Fed Chairman Ben Bernanke and the central bank have hinted that the stimulus plan will be scaled back when the effects of the sequester cuts wane. The stimulus has helped to keep interest rates low and economists and investors say they expect the rates for Americans to increase after 30 years of declination that had eased consumer debt burdens.
What effect would a scaled back stimulus program have on the U.S. economy? Do rising interest rates signal that the economy is improving?
Gail Marks Jarvis, national finance columnist and author of “Saving for Retirement Without Living Like a Pauper or Winning the Lottery” (FT Press, 2012)
Nela Richardson, Senior Finance analyst at "Bloomberg government"