November 22, 2010
Is There Confusion (or Worse) at the Fed?
The Federal Reserve is scheduled to release its updated economic projections this week. These projections, along with the minutes of the November meeting, will be released on Tuesday. This will ostensibly explain why the new round of quantitative easing amounting to a minimum of $600 billion.The revised forecast will show the Fed became much pessimistic over the summer and highlight fears among the some members of the open market committee that the majority of today's 9.6% unemployment rate is structural and will take years to cure.Last June when the Fed published their last forecast, they thought that 2011 GDP growth would be between 3.5% to 4.2%, but now they predict growth between 3 and 3.5%. However many economists in the private sector are more pessimistic, forecasting growth between 2.3 and 3.0%. In order to have any meaningful job creation that rate must be above 4.0%.The FOMC members have also revised their unemployment forecasts, with a majority now...(Read Full Post)