Universal International Ventures The US economy still requires assistance from the Federal Reserve’s ultra-low interest rate policy, but the central bank is committed to removing its stimulus once the economic expansion "matures,” Chairman Ben Bernanke said during prepared testimony before the House of Representatives Financial Services Committee.
In order to combat the crisis, the Fed cut interest rates effectively to zero and embarked on an unprecedented quantitative easing program similar to that undertaken by the Bank of England.
Universal International Ventures : The Fed pledged to fund an asset purchase program totaling over $1.7 trillion. The money was spent buying mortgage debt and Treasury bonds in an effort to force the cost of borrowing down even further.
Mr. Bernanke contended that the programs had helped to improve conditions in mortgage markets which were at the centre of a financial meltdown that commenced when falling home values spurred a wave of defaults.
Universal International Ventures analysts say they do not expect an increase in the Fed Funds rate this year because the pace and momentum of economic recovery in the US makes it prone to drifting back into recession.
The firm also advises that investors consider the rally in the US dollar to be a strictly short-term affair.