The Federal Reserve says it will likely keep interest rates at record lows for the next two years after acknowledging that the economy is weaker than it had thought with increasing risks. The Fed announced that it expects to keep its key interest rate near zero through mid-2013. It has been at that record low since December 2008.
As soon as that 1:00 announcement was made, Wall Street reacted. In a matter of minutes, the Dow dropped nearly 150 points.
The Fed had previously only said that it would keep it low for "an extended period." The more explicit time frame is aimed at calming nervous investors, giving them a clearer picture of how long they will be able to obtain ultra-cheap credit.