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

Fed sees a bottom

NEW YORK ( - 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. SJ

    Now the CNN Media has little room to ask a poll question on Sarah Palin. What was your polling numbers, via your own scorecard...ah and point.

    August 12, 2009 04:01 pm at 4:01 pm |

    More Obama Socialistic Republic of Non-America lies by one of his administration.

    August 12, 2009 04:01 pm at 4:01 pm |
  3. Predicta

    when I see the 9-12 million who are unemployed/underemployed get jobs, I will believe the economy has turned around. Until then, we're just treading water until the next bubble pops. (My guess it will be the stock market next).

    August 12, 2009 04:01 pm at 4:01 pm |
  4. NH Independent

    If you believe this you must believe in Santa Clause.......or you drank too much koolaid

    August 12, 2009 04:03 pm at 4:03 pm |
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