The Federal Reserve pledged on August 9th to maintain near-zero interest rates through the summer of 2013. This was an unprecedented move by policymakers and one has to wonder what they were trying to accomplish by committing themselves now to a specific policy for the next two years.
The federal government really has only two tools for influencing the macroeconomy -- fiscal policy and monetary policy. By committing themselves now to a specific interest rate target, they have essentially neutralized one of those two tools.
I see the announcement as an admission on the part of the Fed that they are unable to further stimulate the economy by lowering interest rate targets. The rates are already as low as they can go; there is no room left for trying to stimulate the economy with actions. All they have left is talk; tell the market that they are going to keep the rates low. It's a fairly impotent policy, not just because it's just talk, but because the pledge is vacuuous: if conditions change, I certainly hope and expect that the actual policy will change as well.
And we have to recall what a low interest rate policy actually means: the Fed will have to increase the money supply at whatever rate is required to satisfy money demand -- which is beyond their control -- at the target interest rate. The Fed is clearly banking on (no pun intended!) money demand remaining anemic, otherwise the very increase in money supply which is intended to keep interest rates low would push nominal interest rates up due to inflationary pressures.
From where I stand, the Fed's handcuffing itself to near-zero interest rates over the next two years smacks of both desperation and gloom. They are desperate to wield monetary policy, to "do something," even when rates are already as low as they can go. And for the Fed to commit to near-zero rates over the longer term says very clearly that they do not expect the economy to recover for some time.