Interest rates on short-term Treasury bills were unchanged in yesterday’s auction. The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.065 percent. An additional $31 billion in six-month bills was auctioned at a discount rate of 0.165 percent. The three-month rate remained the highest since those bills averaged 0.075 percent Oct. 26. The six-month rate remained the lowest since those bills averaged 0.150 percent Oct. 13.

The Federal Reserve proposed new rules to protect consumers from unexpected costs or restrictions on gift cards. More than 95 percent of Americans have received or bought gift cards, the Fed said. Under the proposed rule announced yesterday, consumers must have at least five years to use the gift cards before they expire. The Fed also said service or inactivity fees can be imposed but only under certain conditions.

The Federal Reserve pledged yesterday to keep a key interest rate at a record low for an “extended period,“ signaling that the weak economy remains dependent on government help to grow. The Fed said economic activity has “continued to pick up” and that the housing market has strengthened—a key ingredient for a sustained recovery. But Fed Chairman Ben Bernanke and his colleagues warned that rising joblessness and tight credit for many people and companies could restrain the rebound in the months ahead.

Even with the Federal Reserve widely expected to leave interest rates at a record low today to nurture the fragile recovery, fissures are growing among policymakers about when to start boosting rates to head off inflation. Fed policy makers are slated to release a statement today about 2:15 p.m. The target range for bank lending rate now is at zero to 0.25 percent. If the Fed keeps the same rate, commercial banks’ prime lending rate—used to peg rates on home equity loans, certain credit cards and other consumer loans—will stay at about 3.25 percent.

Treasury Secretary Timothy Geithner is “ultimately responsible” for regulators’ failure to rein in massive bonus payments at American International Group because he led the agencies that provided AIG’s lifelines, according to a bailout watchdog. Geithner was president of the Federal Reserve Bank of New York before taking over at the U.S. Treasury Department in January.

Signaling confidence in an economic recovery, the Federal Reserve decided yesterday to stretch out the pace of a program intended to lower mortgage rates and prop up the housing market. Even so, rates on home loans are expected to remain low. With the economy on the mend, the Fed said it now plans to reach its goal of buying $1.45 trillion in mortgage-backed securities and debt by the end of March, rather than by the end of this year as originally scheduled. It is the second time since August that the Fed has opted to slow emergency programs designed to encourage spending and boost the economy.

Federal Reserve Chairman Ben Bernanke said the worst recession since the 1930s probably is over, although he cautioned that pain—especially for the nearly 15 million unemployed Americans—will persist. His comments drew support yesterday as retail sales figures for August topped expectations. But weak results from two major stores sent a more sobering message: Americans probably aren’t ready to spend in force again.

Interest rates on six-month Treasury bills hit a record low for the third consecutive week. The Treasury Department yesterday auctioned $29 billion in six-month bills at a discount rate of 0.210 percent. That was down from last week’s 0.225 percent and 0.240 percent in the previous week, the previous records. The government started issuing these bills weekly in December 1958.

Economic activity is stabilizing or improving in the vast majority of the country including the mid-Atlantic region, according to a new government survey, adding to evidence that the worst recession since the 1930s is over. The Federal Reserve’s snapshot of economic conditions backs predictions by Fed Chairman Ben Bernanke and most other analysts that the economy has started to grow again in the current quarter.

The outlook for the economy is improving, but a recovery is likely to be “slow and uneven for some time,“ the chairman of the Federal Reserve Bank of Richmond said yesterday as new government figures indicated the recession is waning. “Currently, the latest data indicate that the economy is leveling out,“ Richmond Fed President Jeffrey Lacker said yesterday in a speech to business and community leaders in Danville, the center of a textile-manufacturing and tobacco-farming region with Virginia’s highest metropolitan-area unemployment rate at 12.8 percent.

Federal Reserve Chairman Ben Bernanke offered his most optimistic outlook since the financial crisis struck, saying the economy is on the verge of growing again. Speaking at an annual Fed conference, Bernanke acknowledged no missteps by the central bank in managing the worst crisis since the Great Depression.

Interest rates on short-term Treasury bills fell in yesterday’s auction with rates on six-month bills dropping to the lowest level this year. The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.180 percent, down from 0.185 percent last week. Another $30 billion in six-month bills was auctioned at a discount rate of 0.270 percent, down from 0.285 percent last week.

The Federal Reserve said yesterday that most banks expect their lending to remain tight through the second half of next year, with the exception of mortgage standards, which already are loosening a bit. The Fed’s latest survey of loan officers found that about 20 percent of U.S. banks tightened their lending standards on prime home mortgages in the April-June quarter, down from around 50 percent in the previous quarter and a peak of about 75 percent a year ago.

• Editor’s note: The last name of our guest columnist may sound familiar to readers of this section. The author is the son of Commentary editor Bob Rayner, and he obviously shares his father’s affection for free markets and limited government. He is less sanguine than his dad about the economic legacy of our 43rd president. We’ve all heard that the current recession is the result of capitalism run amok—the consequence of too much deregulation and too little government supervision. While this explanation is plausible in some respects, it ignores the myriad ways in which government actions helped cause the crisis.

The Federal Reserve delivered a vote of confidence in the economy yesterday, saying it would slow the pace of an emergency rescue program and indicating the recession appears to be ending. The central bank also held interest rates steady at record lows, with a closely watched bank lending rate near zero, and again pledged to keep them there for “an extended period” to nurture an anticipated recovery.