Federal Reserve to the Rescue
So, there was big news from the Federal Reserve on Wednesday.
More business news
Krowds: Control from a new angle
The Krowds video app lets multiple people at the same location submit footage from their own point of view.
‘Flywheel’: Take a taxi without cash
Formerly known as Cabulous, this app lets you hail a cab, check wait time and pay for it with a credit card.
Sony urged to cut entertainment stake
Investor Daniel Loeb says Japanese firm should focus on electronics unit.
The Fed said it will keep its key interest rate super low – as in near zero -- until the unemployment rate falls to 6.5 percent or the inflation rate reaches 2.5 percent, reported The Washington Post’s Zachary A. Goldfarb. The Fed says it will also begin buying $45 billion in Treasury bonds a month, on top of $40 billion a month it is already buying in mortgage bonds.
“It was a historic move that for the first time explicitly spells out the Fed’s goals for the nation’s economy and how it will respond to changing conditions,” Goldfarb wrote.
The move by the Fed has an impact on the interest rates consumers pay. For example, 30-year mortgage rates are averaging 3.4 percent, one of their lowest levels ever, reports the Associated Press.
If you aren’t sure how the Fed’s actions affect the economy, read this great explainer by the Associated Press.
I’m interested in what you think. The Color of Money Question of the Week: What do you think of the Fed’s move this week to stimulate the economy by linking its actions to specific economic targets? Send your comments to colorofmoney@washpost.com. Please include your name, city and state. Put “Federal Reserve to the Rescue” in the subject line.
Honest Holiday Shoppers
Police officers in New Hampshire will be sending Santa a good report on a lot of consumers.
The Associated Press reports that police set up a sting outside stores in Manchester, N.H., to see who would be naughty and who would be nice. Officers left a cash-filled purse and a bag holding a DVD player unattended in a shopping cart.
Turns out most people are nice. Shoppers who noticed the purse and bag left in the cart took steps to return the items. Under the law, a person who obtains lost or mislaid property must try to return it. Only two people were arrested after police said they took the items and put them in their cars, the AP reported.
“I think we should all have that expectation that everyone’s going to do the right thing,” said Manchester police Lt. Maureen Tessier.
What a great holiday story. It certainly restores my faith in our fellow man and woman.
Five Myths About the Unemployed
What are some of the misconceptions you have heard and may have repeated about the unemployed?
Older workers hurt job growth. All the available jobs are going overseas. Unemployed people are lazy.
Rick McGahey and Teresa Ghilarducci, economics professors at the Schwartz Center for Economic Policy Analysis at the New School in New York, debunked some of those unemployment myths in one of my favorite Washington Post features.
Here are a few myths that the professors shot down:
-- People receiving unemployment benefits aren’t in a rush to look for work. A report by Congress’s Joint Economic Committee found that people who receive unemployment benefits search harder and smarter for jobs than people who aren’t covered.
-- Older workers hurt younger workers’ job opportunities. “Young and old people aren’t substitutes — they are complements,” McGahey and Ghilarducci write. “What hurts young Americans is adult unemployment. The effect of chronic joblessness is generational: Children of the unemployed get less education and have more trouble finding jobs when they enter the workforce.”
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