Fed Extends Zero Interest Rates to Late 2014

[Stocks-to-Watch]

The Federal Open Market Committee, in a surprise move, said it is further extending its near-zero-interest-rate policy all the way to late 2014 from its previous plan to keep rates there until mid-2013.

With short-term interest rates pegged near zero even longer, Treasury yields fell but stocks have just barely moved into plus territory. The benchmark 10-year Treasury note is back under 2%, at 1.97%, down six basis points.

But the Dow and the S&P are slightly higher after having been a bit lower earlier. Equities can’t be excited by the prospect of growth sluggish enough to keep the Fed pegging near-zero interest rates all the way until late 2014.



Original Article Source by Barrons.com