The Federal Reserve is likely to keep its target range for the federal funds rate at zero to 0.25% through the rest of 2010, according Cambridge Realty Capital Companies, a senior housing and healthcare lender.
In April, The Federal Open Market Committee (FOMC) voted to keep rates near zero. The Fed noted economic circumstances are likely to warrant “exceptionally low” rates for an extended period.
As unemployment is expected to stay high and home values depressed over the next several years, conditions look ripe for exceptionally low interest rates through 2010, said Jeffrey Davis, Chairman of Cambridge Realty.
“Presumably, the Fed will be reluctant to aggressively change course with monetary policy until there is obvious, sustainable improvement in these important indicators, although some tweaking is always possible,” he said.
Davis said that while leading US economic indicators appear to have turned up, the panel of economic experts responsible with identifying peaks and troughs in the business cycle have stated that pronouncing the recession as over is “premature.”
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