Bernanke pledges to keep rates low for an "extended period"
Today Fed Chairman Ben Bernanke told Congress the economy remains "unusually uncertain" and he is prepared to take steps to keep the economic recovery going if things worsen. With the short term lending rate at zero, I’m not sure how many more bullets the Fed has in its gun to spur leverage but the take-away from this is his commitment to keep rates low for an “extended period.” That should bode well for real estate buyers in the near term and help with those who are looking to hedge against possible inflation (or hyper-inflation in some opinions) in the future. In layman terms…you want to have a 4% mortgage on a property when rates go up and cost of goods and services go up too! Why? Mortgages are generally a fixed expense that does not rise when the cost of everything else goes up (including your income hopefully). Right now, however, these historically low rates don’t seem to be getting personal and corporate borrowing ignited. The government needs companies to leverage to build, innovate, expand, but most important of all…hire people! Until employment increases we cannot see real growth… of course this is just the opinion of one businessman in the middle of the Pacific Ocean and his dusty old finance degree. More at: Bernanke comments today
