|
Savers: The steady pace of the Fed's bond purchases isn't going to please savers. Super-low rates have squeezed people who depend on interest income. Americans' annual interest income fell 11 percent
-- from $1.36 trillion to $1.21 trillion -- between 2008 and 2012, the Commerce Department says. Rates on saving accounts have become nearly invisible. The annual percentage yield on the average U.S. money market account is 0.1 percent, according to Bankrate.com. The average one-year CD is paying 0.7 percent. Job seekers: The Fed's message offered scant hope for people looking for work. Its forecast for economic growth this year is a meager 2 percent to 2.3 percent, slightly weaker than its forecast three months ago. It expects unemployment to remain a still-high 6.4 percent or higher through next year. "We're still not satisfied, obviously, with where the labor market, the job market is," Bernanke said. He noted that many job seekers have grown discouraged and given up looking for work. Budget impasse in Washington. Fed officials have grown concerned that a budget battle in Washington will further damage the economy. Unless Congress agrees to fund the government past Oct. 1, the government will shut down. Then, next month, the government will reach its borrowing limit. If Congress won't raise that limit, the government won't be able to pay all its bills. The risk of a shutdown or default would likely rattle financial markets and could scare businesses and consumers into spending less. "When there's all this disruption in D.C., it attacks the confidence of the consumer," said Frank Sorrentino, CEO of ConnectOne Bank in Englewood Cliffs, N.J. Bernanke delivered a sober message: "A failure to raise the debt limit could have very serious consequences for the financial markets and for the economy. ... This is one of the risks that we are looking at as we think about policy." The reprieve from a pullback in the Fed's stimulus is temporary. The central bank is still expected to scale back its purchases at one of its next meetings
-- in late October, in mid-December or sometime early next year. That is, if the economy has improved by then.
[Associated
Press;
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.