An announcement from Federal Reserve Chairman Ben Bernanke this morning that the interest rates would be maintained at a discounted investors caused stocks to surge, but it’s not all positive. While investors rejoice over the sustained near-zero interest rate, Bernanke stresses it’s not a positive measure, but rather indicative of the lack of stability in the U.S. economic recovery. The level of the interest rates is a security measure extended to ensure the weak market doesn’t collapse without the braces put in place by the Federal government.
Bernanke gave little indication of when monetary policy would change, only emphasizing, to little shock that present discounts would remain the same. Investors and Fed watchers are forced to make their own estimation for when the rate would change with many imagining it to be in late spring and other anticipating a shift by fall.
The fact that a delay will be in place for the time being, despite other government supports being rolled back has lowered anxiety among investors.The Dow Jones Industrial Average rose 96 points to trade at 10,378 in afternoon trading Wednesday.
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