Fed’s Yellen: rates could be near zero for years (Reuters)

I’m 100% agree with Yellen, this was all a fore gone conclusion once they headed down with the rates. You can’t go all the way to zero and then ramp back up. They will have to keep the defendant people defendant until further notice. While we should have been raising rates for over a year now, it appears the Bernanke / Greenspan era is still fully intact!! And there are still downside potential and uncertainties head of us.

If you think things are bad now, you have not seen anything as of yet. Many more failed banks, failed companies, job losses and foreclosures coming and all at a time when this President is pushing a bill through that will be the highest tax increase in the history of our country. Worse it ensures all by itself massive Government and continued massive deficits.

Rate raise? forget about it.

“SAN FRANCISCO (Reuters) – U.S. benchmark lending rates could stay near zero for a couple of years based on the amount of slack now in the economy, San Francisco Federal Reserve Bank President Janet Yellen said on Tuesday.

“My staff has looked at 12 different ways to calculate the output gap,” and every one points to a large gap between current and potential output, Yellen told reporters after a speech in San Francisco.

Bets in futures markets on a rate increase as soon as late 2009 are “jumping the gun,” she said.

The jobless rate is likely to continue climbing this year, and the moment the recession ends is “not the right time to take away the punchbowl,” said Yellen.

She added that views circulating that the Fed risks triggering some kind of hyper-inflation by not rushing to raise interest rates are “misplaced.”

Yellen is a voting member of the Federal Open Market Committee in 2009.

(Reporting by Ros Krasny; Editing by Jan Dahinten)”

http://news.yahoo.com/s/nm/20090701/bs_nm/us_usa_fed_yellen;_ylt=ArkktmQsYDM6N9tdmFKh45t0fNdF

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