US savers seen as part of slow recovery
The central bank has held overnight interest rates near zero since late-2008, and it reiterated on Wednesday that it expects to keep them there through at least the middle of 2015.
Some officials at the central bank wonder if such an unusually prolonged period of low returns on bonds, certificates of deposit and other short-term investments is leading savers to cut back on spending more sharply than they normally would when interest rates drop, undermining the recovery.
They were counting on getting a certain amount of return from their investments, and consuming based on that, James Bullard, president of the St. Louis Federal Reserve Bank, told Reuters in a recent interview.
Since they are not getting it, they have to reduce their consumption, and that seems to be like an effect that isn't often considered in our macroeconomic models, said Bullard, who will be a voting member of the Fed's policy committee in 2013.
The Fed's aggressive action to force down borrowing costs is aimed at the high unemployment, depressed home prices and hefty debt levels that are still the central explanations for the reluctance of Americans to spend more aggressively.
But savers are making themselves heard, with politicians speaking up on their behalf as part of a broader election-year attack on the Fed, which has become a lightning rod for Republican anger over government
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