Fed: The Economy is in Recovery

There have been many reports indicating various signs of economic recovery that have turned out to be less than definitive, but it seems that everyone has faith in the economy as of late. The Federal Reserve is the latest entity to express its optimism for the economy, releasing a positive assessment of the situation that has rallied investor confidence.

In its statement, the Fed also revealed that it would slow the purchase of mortgage debt in order to keep the program alive until next March, a sign that the sense of urgency on the part of the Fed to take action has abated. In addition to releasing this statement, the Federal Reserve also recently decided to keep overnight lending rates close to zero percent, emphasizing its commitment to keeping rates very low for an extended period of time.

The Fed has increased its balance sheet to around $2 trillion throughout the duration of the economic crisis, reflecting its strategy of infusing the financial markets with cash to keep things flowing. It also continues its plan to buy $300 billion in government bonds and $1.45 trillion in mortgage-related debt to keep rates low.

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