Wrapping up a two-day meeting today, the Fed in a 9-1 decision retained its pledge to hold rates at record-low levels for an "extended period." Doing so will energize the rebound.

The Fed expressed confidence that the recovery will stay intact despite headwinds from abroad and at home. But Chairman Ben Bernanke and his colleagues struck a more cautious tone about the strength of the rebound.

The Fed said the economic recovery is "proceeding." That was a bit less upbeat than at its last meeting in April when the Fed said economic activity continued to "strengthen." The Fed also said the labor market is "improving gradually."

While not mentioning Europe by name, the Fed said "financial conditions have become less supportive of economic growth ... largely reflecting developments abroad."

Low rates serve borrowers who qualify for loans and are willing to take on more debt. But they hurt savers. Low rates are especially hard on people living on fixed incomes who are earning scant returns on their savings.

Management