Federal Reserve Chairman Ben Bernanke says that with the weak state of the economy, interest rates will remain low for months to come.
"The federal funds rate is likely to remain exceptionally low for an extended period," Bernanke said Wednesday.
The government has been trying to prop up the housing and job markets. However, new home sales plunged 11 percent last month. That's the lowest level in the nearly 50 years that records have been kept.
Bank lending is also plunging rapidly. The Wall Street Journal reports banks had their sharpest decline in lending last year since 1942.
"As the impetus provided by the inventory cycle is temporary and as the fiscal support for economic growth will likely diminish later this year, a sustained recovery will depend on continued growth in private-sector final demand for goods and services," Bernanke said. "The job market remains quite weak."
Bernanke gave no indication as to when the Fed would be raising interest rates. But most experts predict such a move would be months away.