Financial Accounting Blog

Tuesday, November 18, 2003

This MSNBC article gives an interesting commentary into the thinking of the central bank when it comes to interest rates. Even though it is believe that the economy is on the turnaround, the US central bank has decided to keep interest rates at 40 year lows while other countries such as Australia and Britain have already raised their rates.
"Fed Chairman Alan Greenspan and his cohorts believe they can take their time before raising rates. Despite investors' skepticism, Fed insiders believe the U.S. is in a unique period where inflation is so low ? and the economy still boasts so much slack ? that they can relax and let things rip. "In these circumstances," Greenspan said on Nov. 6, "monetary policy is able to be more patient."