The Federal Reserve, the central bank of the United States, announced that its main focus will now be on lowering the unemployment rate. It plans to keep interest rates at historically low levels until the unemployment rate is below 6.5 percent. The last time the country experienced that rate of unemployment was in late 2008. By keeping interest rates low, the Federal Reserve expects to incent businesses into borrowing money for expansion and hiring. Part of the reason why the Federal Reserve is able to maintain this policy is because inflation is under control. When rates are too low, it can lead to inflation but that hasn’t been the case lately and no material change is expected in the inflation rate for the time being.
Learn more at The New York Times.
Read more Finance Watch articles.
Photo credit: Shutterstock