TOPICS > Economy

News Wrap: Fed Keeps Interest Rate Low

March 16, 2010 at 12:00 AM EST
Loading the player...
In other news Tuesday, the Federal Reserve kept interest rates low and gave an optimistic view of the economy and Honda launched a recall on several vehicle models because of brake problems.
LISTEN SEE PODCASTS

TRANSCRIPT

HARI SREENIVASAN: The Federal Reserve kept short-term interest rates at record lows today. The central bank pledged again to maintain those levels for an extended period, perhaps as long as six months. A Fed statement also said business spending is rising, but consumer spending has been held down by high unemployment.

Wall Street took the Fed announcement mostly in stride. The Dow Jones industrial average gained more than 43 points to close at 10686. The Nasdaq rose more than 15 points to close at 2378.

Another major auto recall is in the works over brake problems. This time, it’s Honda. The company today recalled 410,000 Odyssey minivans and Element small trucks for model years 2007 and 2008. Honda said the brakes can feel soft and eventually lose power. Federal regulators have reported three crashes, with minor injuries.

The president’s top economic advisers took some heat today over jobs and the economy from both parties. At a House hearing, Republican Jerry Lewis of California charged, the administration is spending and taxing too much. And Democrat Marcy Kaptur of Ohio complained, the president’s aides were out of touch, as unemployment in parts of Ohio tops 15 percent.

REP. MARCY KAPTUR, D-Ohio: We have more cities poor in this country than any other state now. Our food bank lines are growing longer. Twenty-five percent of our food banks and food shelters turned away people last year.

People are becoming desperate. I am their representative. I can’t politely sit and listen to this and not feel compassion for them and expecting some from you.

HARI SREENIVASAN: But Treasury Secretary Timothy Geithner insisted President Obama has worked hard to spur growth.

TIMOTHY GEITHNER, U.S. treasury secretary: This president acted with enormous care and force and speed, something you had never seen in this country or any other country around the world facing a country like this, and worked to enact in, again, remarkable speed the most powerful set of support for an economic crisis you have ever seen before.

Now, those things were difficult to do. They were unpopular, but they were essential.

HARI SREENIVASAN: Still, the chair of the President’s Council of Economic Advisers, Christina Romer, warned unemployment is likely to stay high for some time to come.

Mexican President Felipe Calderon visited the border city of Juarez today after a surge in drug killings. Over the weekend, two Americans and a Mexican with ties to the U.S. Consulate in Juarez were gunned down in two separate ambush shootings. The FBI has joined Mexican authorities in investigating the murders.

Protesters in Thailand used their own blood today in a bid to force new elections. Members of the Red Shirt movement poured gallons of blood in front of the prime minister’s office in Bangkok. The group includes supporters of the ousted Prime Minister Thaksin Shinawatra and pro- democracy activists. Thailand has been in political turmoil since 2006. More than 100,000 people marched in Bangkok on Sunday.

U.S. troops in Afghanistan face a major restructuring. A spokesman said today U.S. General Stanley McChrystal will have firmer central control. He’s the overall NATO commander in Afghanistan. The New York Times reported McChrystal wants to rein in special forces, mainly to cut down on civilian casualties. The NATO spokesman denied that report.

PepsiCo announced today it’s removing all full-calorie sugary drinks from schools around the world in the next two years. It would be the first soda-maker to do so worldwide in both elementary and high schools. Coca-Cola has said it will no longer sell its drinks in primary schools around the world, unless parents or school districts ask.

Tiger Woods returns to tournament golf at the Masters next month. He confirmed it today in a statement. Woods has not competed since disclosures last fall of his multiple infidelities.

Also today, Sony Music and the late Michael Jackson’s estate announced the largest recording deal ever for the artist’s work, worth $250 million. The seven-year agreement includes songs never before released, plus Jackson’s music catalog.