The US Federal Reserve announced a $267bn plan to underpin the US's fragile recovery Wednesday as chairman Ben Bernanke warned that unemployment was unlikely to improve before the end of the year. The plan – an extension of a scheme known as Operation Twist – aims to drive down long-term interest rate and encourage borrowing. The announcement came as the latest statement from the Fed painted a gloomier picture of the US economy and said it was prepared to take more action if necessary. The Fed said that the growth in employment "has slowed in recent months, and the unemployment rate remains elevated," and that household spending "appears to be rising at a somewhat slower pace than earlier in the year."
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