HERE TO STAY: The economy is unlikely to improve this year, says the Federal Reserve, which sharply reduced its forecast for U.S. growth.
OPERATION TWIST: To prod businesses and consumers to borrow and spend more, the Fed is extending a program designed to drive down long-term interest rates. It also plans to keep short-term rates at record lows until at least late 2014.
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CLOUDS ON HORIZON: Europe’s debt crisis threatens the economy, the Fed said, as does the prospect of sharp spending cuts and tax increases that will kick in at year-end unless Congress acts.
