Jan 25 - The Federal Reserve announced plans to keep interest rates near zero until the latter part of 2014 and revealed an inflation target of 2 percent in hopes of being more transparent about Fed policy. Bobbi Rebell reports.
PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL At a press conference in Washington D.C., Federal Reserve Chairman Ben Bernanke said the U.S. central bank would keep interest rates near zero until late in 2014- more than a year longer than previously stated. The Fed also left the door open to further economic stimulus- Bernanke admitting the economic recovery remains fragile. SOUNDBITE: BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE (ENGLISH) SAYING: "We are obviously hoping that the strength we saw in the 4th quarter and recent data will continue into 2012 but we are going to continue to monitor that situation. I don't think we are ready to declare that we have entered a new stronger phase at this point." Bernanke also suggested the Fed might be willing to tolerate inflation above its just announced first official target of 2 percent- if that helped get jobs for the 13 million Americans looking for work. Barclay's Mike Ponds: SOUNDBITE: MIKE PONDS, CO-HEAD OF INTEREST RATE STRATEGY, BARCLAYS (ENGLISH) SAYING: "The unemployment rate has moved down from 9.2 percent down to 8.5 percent over the past year but what they are saying is that that's nowhere near enough relative to where they want it to be." But former Atlanta Fed President Bill Ford vehemently disagrees with the inflation strategy. SOUNDBITE: BILL FORD, FORMER PRESIDENT, ATLANTA FEDERAL RESERVE (ENGLISH) SAYING: "The range should be minus one to plus one. If prices went down by one percent that would not create the Great Depression. They are excessively worried about deflation and not worried enough about inflation. " The Fed also, for the first time, published policymakers' forecasts - giving a clearer picture of where they think rates are headed. Bobbi Rebell, Reuters.