Results 1 to 2 of 2

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

  1. #1
    Senior Member AirborneSapper7's Avatar
    Join Date
    May 2007
    Location
    South West Florida (Behind friendly lines but still in Occupied Territory)
    Posts
    117,696

    Fed lowers its projections for economy

    Fed lowers its projections for economy
    The Associated Press
    2:39 PM EST November 19, 2008

    The Federal Reserve on Wednesday sharply lowered its projections for economic activity this year and next, and signaled that additional interest rate reductions may be needed to help combat the worst financial crisis to jolt the country in more than a half-century.

    With the economy forecast to lose traction, or even jolt into reverse, unemployment will move higher, the Fed predicted.

    Facing the likelihood of "significant weakness" in the economy, some Fed officials suggested "additional policy easing could well be appropriate at future meetings," according to documents from the Fed's most recent closed-door deliberations on interest rate policy at the end of October.

    At that Oct. 29 session, the Fed ratcheted down rates to 1 percent, a level seen only once before in the last half-century. Many economists predict the Fed will lower rates again at its last meeting of the year on Dec. 16, to help brace the sinking economy.

    Even while hinting that another rate reduction could be forthcoming, Fed officials worried that the effectiveness of previous rate cuts "may have been diminished by the financial dislocations, suggesting that further policy action might have limited efficacy in promoting a recovery in economic growth," the documents said.

    To help ease financial turmoil and spur banks to lend money more freely again to customers, the Fed has taken a series of other unprecedented steps, including offering short-term cash loans and buying up mounds of short-term debt that companies rely on to pay day-to-day expenses like payrolls and supplies.

    Under its new economic forecast, the Fed now believes gross domestic product could be flat or grow by just 0.3 percent this year. GDP could actually shrink or expand by 1.1 percent next year. Both sets of projections are lower than the Fed's forecasts delivered to Congress in July.

    GDP is the value of value of all goods and services produced within the U.S. and is the best measure of the country's economic health.

    The forecasts are based on what the Fed calls its "central tendencies," which exclude the three highest and three lowest forecasts made by Fed officials. The Fed also gives a range of all forecasts that showed some Fed officials projecting a 0.3 percent dip this year, followed by a deeper 1 percent contraction next year.

    The prospects for weaker economic activity will push up unemployment. The Fed projected that the national unemployment rate will rise to between 6.3 percent and 6.5 percent this year. The rate in October was 6.5 percent, and last year the rate averaged 4.6 percent.

    Next year, the Fed expects the jobless rate to climb to between 7.1 percent and 7.6 percent - also higher than its summer forecast.

    Inflation, meanwhile, is expected to be lower this year and next compared with the Fed's previous forecast. A global economic slowdown is sapping demand for energy, food and other commodities, driving down prices and reducing inflation risks.

    http://news.mobile.msn.com/en-us/articl ... d=27806827
    Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)

  2. #2
    Senior Member
    Join Date
    Jul 2008
    Location
    NC
    Posts
    11,242
    The forecasts are based on what the Fed calls its "central tendencies," which exclude the three highest and three lowest forecasts made by Fed officials. The Fed also gives a range of all forecasts that showed some Fed officials projecting a 0.3 percent dip this year, followed by a deeper 1 percent contraction next year.
    It is the same old twisted statistics they have examined for years. We already have a 1 percent contraction at this point in time.
    Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •