The minutes from the last FOMC meeting gave its economic forecast for
growth, unemployment and inflation. They modestly raised its 2nd half
’09 GDP estimate but trimmed its ’10 GDP range. They expect the
unemployment rate to reach above 9% from below 8% previously. Their
inflation forecasts were little changed. The rest of the minutes focused
on the less negative data points we’ve seen but at the same time focused
on the risks that remain.With respect to their asset purchases, they
agreed that the “purchases were providing financial stimulus that would
contribute to the gradual resumption of sustainable economic growth in a
context of price stability.” They agreed to remain on pace with the
amounts previously stated but “some members noted that a further
increase in the total amount of purchases might well be warranted at
some point to spur a more rapid pace of recovery,”but they’ll wait and
see how things play out.

Category: MacroNotes

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2 Responses to “FOMC minutes”

  1. rob says:

    So on the stress tests, a more a decrease of 2.0 of GDP was assumed in the testing and now the Fed is forecasting -2.0 for 2009, Employment was tested to be “More adverse” at 8.9% and they are now forecasting it will go to 10% this year! Not to mention we’ve already based the “more adverse” level already. Housing was assumed to be “adverse” at -22% in the tests… well we know how that is turning out! So WTF are these green shoots and do the stress tests need to be rerun especially since all the secondary issues are out of the way? What a rip off of investors! These worthless F*/-$ are losing all creditability with me!

  2. leftback says:

    I agree with Roubini. The FOMC are smoking yellow weeds, not green grass.