Fed keeps low interest rates

In his press conference yesterday, Federal Reserve Chairman Ben Bernanke pledged to retain low interest rates in spite of inflation worries. Karen Shaw Petrou of Federal Financial Analytics explains.

STACEY VANEK SMITH: Federal Reserve Chairman Ben Bernanke held a press conference yesterday to map out the Federal Reserve’s plan going forward. Bernanke said the recovery is still fragile and in spite of inflation worries the Fed won’t raise interest rates. Karen Shaw Petrou of Federal Financial Analytics joins us now. Good morning, Karen. KAREN PETROU: Good morning Stacey. SMITH: So, obviously people all over the world were watching Bernanke’s speech yesterday. Were overseas markets happy with what they heard? PETROU: They were thrilled because easy money is good for stock markets and the markets reacted in kind. SMITH: How is it easy money because it seems as Bernanke indicated that they’re going to be easing up on all of the federal stimulus. PETROU: They will but it’ll take a long time for the Fed’s policy to first stop and then to really drain out of the financial markets.

To listen to the show click here: http://marketplace.publicradio.org/display/web/2011/04/28/am-fed-keeps-low-interest-rates/?refid=0