Fed banks saw economy stabilizing, weak in August
Written on September 9, 2009
Regional Federal Reserve banks saw the U.S. economy as stabilizing though still weak in August and none wanted to raise the rate the Fed charges emergency borrowers, documents released by the Fed on Tuesday showed.
Fed banks noted that household spending was still weak and some officials worried that high unemployment would hurt consumer spending and slow the economic recovery, according to discount rate minutes. The discount rate is the rate the Fed charges banks for loans from its last-resort lending facility.
The Fed — the U.S. central bank — held interest rates steady at a range between zero and 0.25 percent at a meeting ending August 12 and held the discount rate at 0.5 percent.
Policy makers said the unemployment rate — which a subsequent report showed hit a 26-year high of 9 guaranteed online payday loans.7 percent in August — along with unused factory capacity was inhibiting business investment. They were encouraged that inventories were being drawn down, however.
Most regional Fed banks believed inflation was subdued and likely to stay that way for a while.
The next meeting of the Fed’s policy-setting Federal Open Market Committee is September 22-23. Policy-makers say they will keep interest rates exceptionally low for a long time.
(Reporting by Mark Felsenthal; Editing by James Dalgleish)
Filed in: technology.