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The US Federal Reserved Wednesday decided to leave a Key interest rate at a record low in an effort to foster economy recovery world wide. Wrapping a two-day meeting, the Federal Open Market Committee (FOMC) said in a statement that it will maintain the target range for the federal funds rate at 0 to 0.25%, indicating that it will leave the benchmark interest rate at exceptional low levels “for an extended period” of time. The committee expressed concerns that while household spending seems to be stabilizing, it remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Read more

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Last week, Crude Oil fell below US$40 bbl after news of mounting job losses in the USA augured for still weaker demand in the world’s biggest oil consumer. Nearly 600,000 people found themselves out of work in the USA last month, many more than Wall Street economists had expected. The economic slowdown has curbed demand for fuel around the world and knocked US Crude Oil briefly beneath US$39 bbl for the first time in nearly three weeks.” It gets worse and worse and worse,” said Greg Salvaggio of Tempus Consulting in Washington. “The economy is just falling into oblivion.” US light crude for March delivery was down US$1.48 at US$39.69 bbl last Friday the lowest since January 20. London Brent, which usually trades below its US counterpart, fell US$1.03 to US$45.43 bbl at the same time.

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The US companies suffered the biggest job losses since 1974 in November. Non-farm payrolls were cut by 533,000 in November, much deeper than many economists expected. The report topped off a week of poor data from advanced economies plus significant interest rate cuts in the UK and eurozone.

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