St. Louis Fed President James Bullard Says Rates Will Remain Low for Some Time

St Louis Fed President James Bullard says that rates will remain low for some time. For those hoping that short-term savings and cd rates will increase anytime soon - forget about it.

"Policy rates are near zero in the U.S. and the rest of the [Group of Seven] countries, something not seen in postwar economic history," Bullard said in an address to a conference in Shanghai. "Interest rates may remain low for quite some time."

According to Bullard, the biggest challenge  going forward will be "how to adjust the asset purchase program without generating inflation and still providing support to the economy while interest rates are near zero."

To me, this indicates that the Fed is not planning to end asset purchases anytime soon. Expect the Fed to continue purchasing Treasuries and mortgage backed securities in order to keep mortgage and longer-term interest rates down.

More good news for borrowers and bad news for savers.

Sam Cass
Sam Cass: Sam Cass, MBA, JD, University of Texas at Austin. Always a fan of Leonardo Da Vinci.

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