Fed's Duke Expects Low Interest Rates For 'Extended Period'

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Federal Reserve Governor Elizabeth Duke said on Monday that "exceptionally low" interest rates are likely to be retained by the central bank for an "extended period" to foster a recovery in economic activity and job creation.

"In the current environment, the FOMC continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period," Duke told the Economic Forecast Forum in Raleigh, North Carolina.

"Such policy accommodation is warranted to provide support for a return over time to more desirable levels of real activity and unemployment in the context of price stability," she added.

Given the various factors likely to influence the path of economic activity in 2010, she expects the economic recovery to "continue at a moderate pace."

While getting loans remain difficult for consumers and small businesses, Duke said that she was "somewhat optimistic" that lending standards will improve later this year. She also expects inflation to "remain subdued," with resource utilization likely to remain below historical norms for some time.

Federal Reserve Governor Elizabeth Duke said on Monday that "exceptionally low" interest rates are likely to be retained by the central bank for an "extended period" to foster a recovery in economic activity and job creation. (Market News Provided by RTTNews)