After Fed holds rates again, does zero mean forever?

September 17, 2015 11:53 PM

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After Fed holds rates again, does zero mean forever?

WASHINGTON When the Federal Reserve drove its target interest rate near zero in late 2008, it sparked an economic debate about the risks of having nowhere lower to go, and in particular the financial bubbles it might stoke.

Six years later few bubbles are in sight, but a new risk has emerged: that the zero has become an effective anchor on interest rates that is proving far more difficult to abandon than the Fed expected.

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