The interest rates have remained low for quite some time now. Economists think the chairman and policymakers will wait too long to raise interest rates rather than risk hiking too soon.
Recent language from the Fed caution that it expects economic conditions "likely to warrant exceptionally low levels of the federal funds rate for an extended period." This leads to the belief that the Fed will wait until we see an increase in consumer spending and inflation warning signs.
So should we leave the rates around 0% until we are absolutely sure the economy is back on track? Well, that comes with some risks as well...Low rates can sow the seeds of inflation, and lessen the value of the dollar versus other major currencies, which in itself can limit Americans' buying power.
What do you think? Will the hold all the way though 2010? Will the continued low rates help spur the economy and the housing market? Please share your thoughts!
Michael Caruso, Broker ABR ABRM CRB CRS GRI GREEN
2007 President, Orange County Association of Realtors
Information gathered from cnn.com
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