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Reviving the Economy in 2013

Per the New York Times, the Federal Reserve will be holding rates down until the jobless rate is below 6.5%.  November jobless rate was at 7.7 percent.  They will be maintaining their efforts to revive the economy in the New Year by continuing their monthly purchases of $85 billion in Treasury bonds and mortgage-backed securities.  The plan is to continue buying bonds until the outlook of the labor market improves substantially, reiterating a policy that was first announced back in September.

Looking even further into the future, the Fed said that it expected to maintain short-term interest rates near zero, even after it stops buying bonds, for as long as the unemployment rate remained above 6.5%, provided that medium-term inflation does not exceed 2.5 percent.