Tuesday, March 9, 2010

Fed: Rates To Stay Low For Quite a While Longer Due To Weak Unemployment

Speaking of currencies and why the Canadian loonie and the Aussie dollar will do so well (please see our post earlier today), BNN reports that Chicago Federal Reserve Bank President Charles Evans, a top Federal Reserve official said today that the very weak U.S. labour markets are likely to justify easy money policies for quite a while longer:

"Labour market issues ... lead me to think this accommodation will likely be appropriate for some time,", Mr. Evans was quoted in remarks to the National Association for Business Economics.

He added that tecent reports on the jobs market have been mixed: "Once you look past the headline numbers, however, some other labour market indicators are unusually weak,"'

He also mentioned that despite debate over how much slack there is in the economy, the current high unemployment levels make it an undeniable fact that that output is well below the economy's potential. He said that the Fed has taken its extensive purchases of long-term assets, as far as has been useful in supporting the economy.

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