A long time...

This week, the Federal Reserve Open Market committee met to discuss possible changes to their current policy of holding interest rates in the ultra low range of 0.0-0.25% where it is currently. As expected, they decided to keep rates unchanged. More importantly, were their much anticipated comments afterwards, which traders and analysts try to decipher to detect trends in the future. Fed Chairman Ben Bernanke stated in part, that even though there are positive signs of growth in GDP and the end of the current recession is at hand, the current unemployment situation is a problem that will take a while to see improvement. Because of this, the FMOC sees themselves holding interest rates at this very low level, for "an extended period of time". Meaning, it could be a couple of years before they see the need to begin raising interest rates again. Economists are not predicting the unemployment rate to decline to "normal" levels until sometime in 2012. So for people looking for rates to go back up on CD's, money market accounts, and other savings accounts, you might have a long wait on your hands. What does this mean for savers and investors? It might be time to begin looking at alternate options for higher yield. Longer maturity CD's (5 years or more), Bonds, and dividend paying stocks and/or ETF's, might be in order for people needing higher income. Some folks will have to move into some higher risk investments to make their long term plans work out. But everything has a risk. Staying in short, low yield, CD's carries interest rate risk, and inflation risk. Where do you need to be?