The US FED has taken the bank interest rates to an all time low of near zero. This is expected to help banks to push more funds into the economy which is the only way to revive. Even with a very low interest rates, banks are reluctant to fund industries, fearing bad debts.

Quite a few of the US banks have gone under in the last one year due to bad debts created by the sub prime mortgage crisis and the Lehman Brothers collapse.  And most of the remaining banks have taken a huge financial support from the US government. Hence, no bank wants to take the risk of creating new bad debts.

The US FED is expected to take the next step of printing new currency notes and also direct buying of debt papers from leading corporates, in order to induce the banks to normalize their lending process. Once the recovery starts and normalcy returns to the credit market, authorities are expecting the growth to trickle in.

Only after the growth accentuates to a decent level, which is expected by the middle or end of 2010, we can expect the US FED to start raising the interest rates again, to cool the economy. Till then the low, near zero, interest rate regime is expected to stay.