August 12th, 2009
02:40 PM ET
5 years ago

Fed sees a bottom

NEW YORK (CNNMoney.com) - The Federal Reserve said Wednesday it appears that the U.S. economy has halted the longest period of decline since the Great Depression, although it cautioned that economic activity is likely to remain weak in the near term.

The central bank left its key overnight interest rate at 0% to 0.25% range, as expected. Its statement at the conclusion of its two-day meeting said "economic activity is leveling out." That is its most bullish assessment of the economy in more than a year, and suggests that a recovery may have started.

It said that it still expects "inflation will remain subdued for some time" and said that it expects rates to remain near zero percent "for an extended period."

The Fed cut interest rates to the record low range at its December meeting in an effort to spur the struggling U.S. economy at that time.

It also pumped about $1 trillion of cash into the economy during the last year through a number of extraordinary programs, including the purchase of Treasurys and mortgage-backed securities, as well as new programs to get banks and other lenders to extend credit to consumers.

But in recent weeks there has been a growing consensus among top economists that the U.S. economy has turned around or is close to doing so. A number of economic readings, including the government's employment report and the gross domestic product, the broadest measure of the nation's economic activity, have improved - although they still show job losses and a modest drop in GDP.


Filed under: Economy
soundoff (54 Responses)
  1. MatthewDetroit

    GOOD. NOW we dont need to spend any stimulus money. Put it back and then we can shave that off our National Debt.
    It was not needed in the first place.
    Stop spending and we will be just fine.

    August 12, 2009 02:42 pm at 2:42 pm |
  2. Idiot_Pelosi

    But what about OBAMA's PORKULUS (So called Stimulus) bill that was going to jump start the economy....

    Just what I thought. Increased defict to fund some pet liberal projects with no way to pay for it other than increased taxes.

    Nice Job Bo Bo the Clown

    August 12, 2009 02:42 pm at 2:42 pm |
  3. SIMP

    This is good news. However can't you sound a bit more uplifting without blowing the change out of control? Dang this is one the most dreadful articles I have read that states the economy has a ray of light at the end of this bush tunnel.

    August 12, 2009 02:50 pm at 2:50 pm |
  4. carlo

    Why aren't the wingnutter divisions of the GOP posting on here? That's right, they're hoping that President Obama fails, and good news for the country is bad news to them.

    August 12, 2009 02:52 pm at 2:52 pm |
  5. Jimmy the Greek

    LOL.... this is nothing more than Rainbows & Unicorn WISHING!

    The Fed has the interest rate at Z-E-R-O, so they have no where else to go but up. They HAVE to report good news – otherwise they're useless.

    WHEN is the Federal Reserve going to be audited?????

    August 12, 2009 02:57 pm at 2:57 pm |
  6. Sniffit

    Better than the bottom we've been looking at lately...i.e., the GOP's collective bottom, since they've been mooning common sense and everyone else in the country out of spite, bitterness and anger. Of course, I fully expect them to get so jealous about the Fed looking at a different bottom here that they wilil appear in droves in this Commentary Section in a mad attempt to draw attention back to their collective bottom.

    August 12, 2009 02:57 pm at 2:57 pm |
  7. alvino

    " . . .the U.S. economy has turned around, or is close to doing so." is bad news for the party of "No!" Despite their efforts to get in the way of moving our country forward, we are getting out of the economic hole that was given to Obama.

    August 12, 2009 02:58 pm at 2:58 pm |
  8. David Newport, OR

    I wonder if we would have had the same results if we pulled the GOP tactic of sticking your head in the sand and repeating over and over "it's not our fault"?

    August 12, 2009 02:58 pm at 2:58 pm |
  9. Maximus (NY)

    That is good news for America, but bad news for the republicans who
    are praying that Obama's administration fail. But good jugment will always overcome ignorance and hypocrisy.

    August 12, 2009 02:59 pm at 2:59 pm |
  10. alvino

    At least the ring nuts will always have their militias.

    August 12, 2009 03:00 pm at 3:00 pm |
  11. demwit

    1% drop in GDP and 250,000 Americans losing their jobs isn't pretty good..., progressively speaking.

    August 12, 2009 03:00 pm at 3:00 pm |
  12. TCM

    More misinformation spewed out by the Obama administration in efforts to gain confidence from the True Americans on his radical agenda....just watch any finanicial show, read the Wall St. Journal, and observe the markets...the Fed's in the tank with Obama, and whenever he needs a positive boost, he picks up the phone and creates some propaganda....we're not at the bottom yet; so everyone should practice frugality in their spending......

    August 12, 2009 03:00 pm at 3:00 pm |
  13. Anonymous

    The U.S. economy has halted the longest period of decline since the Great Depression

    Thank you President Obama

    With out a doubt, your swift action, and bold initiatives have restored confidence and prevented an outright collapse of our economic system.

    August 12, 2009 03:00 pm at 3:00 pm |
  14. Dave in Illinois

    So the economy is still in the toilet but the flushing has stopped until the stimulus, cap and trade and healthcare deficits hit.

    August 12, 2009 03:00 pm at 3:00 pm |
  15. Dutch/Bad Newz, VA

    Let the recovery begin. Consumer spending is down which is expected due to the fact of the unemployment rate. Once consumer spending picks up, we'll see a major boost in the economy. I think the DOW will be back at 13000.00 by 11/10 right in time for mid term elections. The Party of No is going to regret voting against the stimulus bill.

    August 12, 2009 03:05 pm at 3:05 pm |
  16. katiec

    What took eight years to create is not going to be resolved overnight.
    Although not easy, we must have patience.
    We have to believe that better times are coming and one day our
    country will return, in all ways, to the greatness we once had.

    August 12, 2009 03:06 pm at 3:06 pm |
  17. dominican mama 4 Obama

    My God!!! They actually used the "D" word.

    Obama and other brilliant minds are turning this ship around. And in ONLY 6 months! Imagine that . Then stick that in your pipe and smoke it!!!

    You go Mr. President! Fulfill your destiny and restore America's long lost luster!!!

    Obama 2012

    August 12, 2009 03:10 pm at 3:10 pm |
  18. GOBama

    There are some positive signs in the market, home sales, consumer confidence, first unemployment drop in 15 months, GDP and car sales.
    We still have work to do but let's keep it moving in the right direction!
    God Bless The USA

    August 12, 2009 03:11 pm at 3:11 pm |
  19. g.j man

    what they are not saying is how many tens of thousands of jobs have been lost and will not recover under this administration.

    All the energy jobs have declined in the thousands...Manufacturing jobs go overseas because the liberals dont want any emissions in this country so they make it too expensive to make anything here that is why businesses go overseas. Oil and gas jobs have for the most part gone away under this administration.(I know I work in the energy field and have seen thousands of familes go unemployed since Nobama took office) The economy will never rebound how it was while the democrats think they can make the u.s. a utopia for all americans..

    August 12, 2009 03:13 pm at 3:13 pm |
  20. Melissa

    I see it too. The economy is doing better than it has in a long time. We finally hit bottom. Now its just a matter of waiting for the real recovery to start.

    August 12, 2009 03:14 pm at 3:14 pm |
  21. Bill

    I Disagree.

    Depression is Coming.

    Economy will further tank. We are in 2 wars.
    We are not manufacturing anything, except weapons.

    All our Iron and Steel industries are gone. All our Auto industries are gone. All our textile industries are gone.

    We import everything from China. We even import food from other countries.

    We don't have health care. Gas prices are on the rise.

    Feds are wrong. Depression is Coming. Get ready for it.

    August 12, 2009 03:20 pm at 3:20 pm |
  22. Enough

    All that wasted stimulus money did NOTHING to stimulate the economy. Another failed Obama experiment that flopped............and people actually think this government can run our healthcare!!

    Yikes, can't wait until 2010 to start the healing process!

    August 12, 2009 03:20 pm at 3:20 pm |
  23. They call me "Tater Salad"

    The only "bottom" the Fed is seeing is the "bottom" of the taxpayers pocket's, as well as the future value of the American dollar! I think that's the actual "bottom" they're talking about!

    August 12, 2009 03:20 pm at 3:20 pm |
  24. The Lonely Libertarian of Liverpool NY

    What this means to the working American voter, what few of us are left.

    The wealthy are very pleased with all of the bailout money, and they are no longer in trouble. But to be double sure, the Corporations will continue to cut jobs to improve the quarterly bonuses.

    August 12, 2009 03:20 pm at 3:20 pm |
  25. Mississippi Mike

    So we're basically going to stay in the rut that we're in. That's just great. Most lay people think that a recession has ended when we get back to where we were. Those of us who understand economics know that it means economic growth from where it ended up. No matter how hard Democrats try to convince people that the recession is over, the average person is going to look at the unemployment numbers, declining mortgage prices and boarded up business and scoff.

    August 12, 2009 03:22 pm at 3:22 pm |
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