Low Rates Will Work for the Economy

The Federal Reserve said Wednesday interest rates would remain low until 2014, a year longer that was previously estimated. This was a good move. It shows that the Fed is willing to do what it takes to revive the US economy. More so, a continued low-rate environment will slowly but surely boost bank lending.

The doubling up of households -- kids moving back home with parents or couples with in-laws -- can only last so long. At some point the hormones kick in and people want to be independent again. After the Great Recession, the rate of household formation fell off a cliff. According to U.S Census Data, before the housing bubble burst in 2007, 1,627,000 new households were created, topping off a decade average of 1,499,000 new households a year. But in 2010, that figure was down to 357,000, a drop of 78% percent from three years before....363 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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