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Although the U.S. economy is recovering and creating jobs (atleast that’s what the government says), investors and analysts expect the Federal Reserve to leave interest rates unchanged, this year. In a recent report released, it was stated that a weakening U.S. economy is setting the stage for lower interest rates. The only way to really know what direction you should go is to ask a local expert in mortgage lending or real estate. The Fed claimed that their policies, after the Long Term Capital Management losses, had been successful. The Federal Reserve policy actions are now causing another bubble to form – perhaps one that is worst than the others.

In August, Standard & Poor’s downgraded the U.S. Treasury Debt from an AAA rating to an AA+ rating. S&P indicated that one of the major reasons why they decreased the rating was due to Congress’ plan to reduce the country’s debt did not satisfy S&P’s standards for stabilizing our country’s economic situation. S&P’s explanation seems hypocritical given that S&P was one of the reasons we are in this financial crisis. One of the silver linings from this crisis is that mortgage rates will decrease or remain low. FED, the central bank of America, decided to keep the interest rates low and continue the Quantitative Easing in its meeting. The latest report on US Unemployment released this morning indicates that the unemployment rate remained above 9%, making the markets tumble.  On the contrary, what is Canada doing that we aren’t – their Unemployment Rate has fallen to 7.1% in the last quarter as Canadian Economy has created approximately 61000 jobs.

The price climbed back up relatively fast after the announcement so the effect on the markets was fairly minimal. In a modern environment of economic interdependence, money flows from around the globe increasingly affect individual, corporate and national wealth through nothing more than the changing value of currency relationships. Federal Reserve Chairman Ben Bernanke, reminded the US Senate Budget Committee “we are experiencing what seems likely to be the calm before the storm.” The chairman’s remarks were in reference to entitlement spending.

“Federal Reserve Chairman Ben Bernanke offered a fairly upbeat assessment of the economy on Tuesday, saying the recent surge in oil prices is unlikely to have a major effect on growth or inflation as long as higher prices do not become sustained. Our economy could be in serious trouble if consumer sentiment towards it does not improve. For years, U.S. consumers did not have any savings.