Fed 'best guess': low rates until late '14

The Federal Reserve went further than ever Wednesday to assure consumers and businesses that they'll be able to borrow cheaply well into the future.

The Fed pushed back the date for any likely increase in its benchmark interest rate by at least a year and a half, until late 2014 at the earliest.

Its new timetable showed the Fed is concerned that the economy's recovery remains stubbornly slow. But it also thinks inflation will stay tame enough for rates to remain at record lows without igniting price increases.

Chairman Ben Bernanke cautioned that the Fed's late-2014 horizon for any rate increase is merely its "best guess." It has the flexibility to shift its timetable if the economic picture changes.

But speaking at a news conference later, Bernanke said: "Unless there is a substantial strengthening of the economy in the near term, it's a pretty good guess we will be keeping rates low for some time." The central bank has already kept its key rate at a record low near zero for about three years.The rate forecasts are an effort to provide more explicit clues about the Fed's plans, part of an effort by the central bank to make its communications more open.

The Fed's tepid outlook for the economy suggests it's prepared to do more to help. One possibility is a third bond-buying program to further drive down rates on mortgages and other loans to embolden consumers and businesses to borrow and spend more. -- AP