After a two day meeting, the Federal Reserve suggested this week that the recession is finally over! According to Ben Bernanke, Fed Chairman, last week “the recession is likely history”. It was believed that the Fed would buy $1.25 trillion in mortgage backed securities and $200 billion in mortgage related debt by the end of the year, in an effort to lower mortgage rates. This week, the central bank claimed that it would buy a total of $1.25 trillion by March 31.

According to Conrad DeQuadros, an economist with RDQ Economics, “I think that’s very significant, because it shows the Fed believes mortgage markets still need government support”. He claims that by stretching out the program, this would ensure a “smoother transition to more robust private lending.”

Other economists are still skeptical. Bruce McCain, the chief investment strategist from Key Private Bank, states that “the maneuver also means that the Fed is slowing down its purchases amid less constrained mortgage lending.”

Although, the Fed claims that the worst is behind us, the sky-rocketing level of unemployment across the nation is constraining consumer spending. Until the Americans begin to become employed once again, the economy will remain hindered.