by Peter Grady –
The Federal Reserve has said it is expecting unemployment levels to remain high until at least late 2015, despite its plans to spend billions of dollars a month to keep interest rates low.
Following its final meeting for the year, the Fed announced it would only consider interest rate hikes when the unemployment rate falls below 6.5 percent.
In its economic forecast, the Fed said that while it is expecting economic growth to improve next year, it will not exceed 3 percent. In 2014 the central bank predicts growth could rise to 3.5 percent and 3.7 percent in 2015.
While Michelle Obama says America is in the middle of a “roaring recovery,” the Fed said it expects unemployment to remain at or above 7.4 percent through 2013.
In an attempt to drive unemployment down the Fed announced it will be spending $85 billion a month to ensure interest rates remain low in order to encourage Americans to engage in more borrowing and spending, which they say drives economic growth.
November’s unemployment rate fell to 7.7 percent, due in large part to the number of Americans who have given up looking for work. The government only counts a person as being unemployed if they are receiving benefits and are actively searching for work.