Fed to Keep Low Rates

    WASHINGTON, DC - JULY 17:  Federal Reserve Board Chairman Ben Bernanke testifies before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill July 17, 2012 in Washington, DC. With the release of "The Semiannual Monetary Policy Report to the Congress" on Tuesday, investors hope it will forecast the Fed's next move.  (Photo by Chip Somodevilla/Getty Images)

    Chip Somodevilla / Getty Images

    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.

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