Fed to Keep Low Rates

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Ben Bernanke confirmed his reputation as an easy money man. The Federal Reserve announced it would continue its policy of “quantitative easing”—creating new money to buy bonds in an effort to push long-term interest rates down—until the unemployment rate falls below 6.5 percent. Basically, rates will be kept near zero until the jobless rate drops. The Fed announced it would continue buying $40 billion a month in mortgage-backed securities and would start buying an extra $40–$45 billion in Treasury bonds each month.