Federal Reserve sets new targets for interest rates
The US Federal Reserve has said it plans to keep interest rates at close to zero at least until the US unemployment rate falls below 6.5%.
The Fed previously had a date-driven target, rather than a data-driven one.
The Fed also said it will continue to buy $85bn (£53bn) a month of government bonds and mortgage-backed securities to try to boost the economy.
But changes in the way it does this will mean more money is pumped into the economy.
"The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labour market conditions," the Fed said in a statement.
US stocks rose after the announcement. The Dow Jones, which had been little changed before the statement, jumped 70 points to 13,318.
Interest rates in the US have been close to zero for several years now, and the Fed again kept them at below 0.25%.
But in a surprise move, the Fed adopted numerical thresholds for future interest rate policy, something which had not been expected until next year. It said that it expects to keep rates at this exceptionally low range as long as:
the unemployment rate remains above 6.5%
inflation between one and two years ahead is projected to be no more than a half percentage point above the committee's 2% longer-run goal
longer term inflation expectations continue to be well anchored
The Fed had previously said it expected to maintain rates at their current level until 2015.
Meanwhile back in the real world:
First Hong Kong, Now Aussie Central Bank Gets Ugly Case Of Truthiness
"Central banks can provide liquidity to shore up financial stability and they can buy time for borrowers to adjust, but they cannot, in the end, put government finances on a sustainable course... They can't shield people from the implications of having mis-assessed their own lifetime budget constraints and therefore having consumed too much."
Posted by: tipper 2012-12-13