Interest rates to remain low, but sales of new homes fell

Interest rates to remain low, but sales of new homes fell

February 25, 2010

Federal Reserve Chairman Ben S. Bernanke gave the stock market the tonic it wanted: Interest rates will stay low. Stocks rallied Wednesday and ended a two-day slide after Bernanke sounded an upbeat note about the economy during his semiannual report to Congress. He told the House Financial Services Committee he still expects rates will remain low for an extended period. Investors want to see low-cost borrowing continue to help revive the economy. At the same time, a disappointing report on new-home sales brought the latest reminder that a recovery in the economy will be difficult even with government aid. The Commerce Department said sales of new homes fell to a record low in January. The government said that new home sales fell 11.2 percent last month. That's the lowest level on a record that goes back nearly 50 years. It was the third straight monthly drop.

- Associated Press

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