Click to enlarge:

Source: Bianco Research


Interesting data looking at the Fed’s range of projections of key economic components of GDP, Unemployment and Inflation.




The Economist – The Fed acts, just
Final thought: by extending the expiration date of the programme to December 31st, the Fed accentuates the stimulus withdrawal syndrome scheduled to begin on that date. The Bush tax cuts and payroll-tax cut expire then, and the sequester of automatic spending cuts takes effect on January 2nd. Should we add a monetary off-ramp to the fiscal cliff?

Category: Economy, Federal Reserve

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “The Federal Reserve’s Projections”

  1. LosGatosCA says:

    It’s like a road map showing how long the epidemic of stupidity will continue.

  2. ConscienceofaConservative says:

    Interesting, Has there been any attempt to quantify the jobs created as a result of quantitative easing. It seems all we are doing is pushing investors into risk assets , other than generating above average investment losses in the future it doesn’t appear that this has very much additional impact. The closest one hears anything is with regards to a subset of Americans being in a position to refinance mortgages to the tune of say $100-$200 per month while the lost income on savings would appear to be far greater. Bernanke claims to a great student of the Great Depression but how much has he or anyone else learned from the subprime crisis and what are we doing to measure, learn and apply that schooling.

  3. RW says:

    The central tendency is clear and yet even after four, grinding years of sub-par economic growth the FOMC refuses to meet its own, low inflation target — consistently remaining below rather than averaging around it — and effectively disregards unemployment in all but rhetoric.

    No harm to me personally or financially, and a dearth of appropriate fiscal policy certainly isn’t helping, but as a citizen I still find their behavior morally reprehensible and wrong-headed; unlike a feckless and reckless pseudo-conservative congress, the people on the FOMC are supposed to be technocrats who grasp something more than the basics of economic policy and the consequences of error.

  4. victor says:

    Our elected representatives-left, center and right-have long lived by Louis XIV adage: “apres moi le deluge”. If you fed all their minds into a blender you’ll get: no spending cuts, no tax increases and long live our US Treasury’s stated strategy of stealth default via: a debased national currency, low/negative interest rates as far as the eye can see and “moderate” inflation all aimed at screwing the creditors after all we, the largest debtor on the planet DICTATE the terms.

  5. CoC, QE is a measure to address liquidity more so than OpTwist which in turn is geared to lower rates and entice borrowing for the expansion of commerce and home building.

    The applicable path to address unemployment would have been and remains infrastructure projects (as shown in Canada and elsewhere). Unfortunately, the Democrats continue to block long term entitlement cuts which would pave the approval for US infrastructure programs. Hopefully the Nov Election will facilitate some better numbers for the necessary voting blocks and abuse of the Presidential veto.

  6. SecondLook says:

    We’ve had more than four years of “sub-par” growth. From 2001 to 2011, average GDP growth has been under 2% – compared to the long term average of slightly over 3%.

    I think the argument can be made that the we’ve entered a new era where “par” is closer to 2-2.5% long term real GDP growth than the 3%+, we experienced in the latter half of the 20th century.

    A few interesting statistics about historical GDP growth rates for the United States.

    Real GDP average growth rate 1790-2010: 3.74%

    1790 -1900: 4.32%
    1901-2000: 3.31%
    2001-2010 :1.6%

    Another way to parse it that is a little more personal is by life times, using that old standby of 3 score and 10.

    1790-1859: 4.45%
    1860-1929: 3.65%
    1930-1999: 3.68%

    For the baby boomers, starting with the first:

    1946-2010: 3.16%

    Using the first set, a long term down slope in growth seems evident.
    The second is more sanguine, a stable rate from 1860 to 1999.
    The third shows that, for the boomers, they have lived most of their lives in an economy that has grown slower than their ancestors.
    Oh, their children? For the oldest of that group, the rate so far is about 2.85%.

    The possibility, that is natural for a modern economy (industrial revolution) to gradually slow down isn’t something that we can easily accept, but the data suggests that it is a very real one.

  7. SecondLook says:

    Taking my blog handle as a cue, I went back and looked at perhaps a more important number – GDP per capita.

    Real GDP per capita from 1790-2010: 1.7%

    1790-1900: 1.55%
    1900-2000: 1.99%
    2001-2010: .66%

    1790-1859: 1.38%
    1860-1929: 1.64%
    1930-1999: 2.45%

    Baby boomers: 1946-2010: 1.9%

    That paints a different picture. The drop in population growth rates more than offsets the declining rate of GDP growth. That also should be food for thought for those who are worried about demographic decline; if a country can maintain a positive, even if modest, GDP growth as if it loses population, the net effect is greater per capita wealth. With fewer slices, the pie doesn’t really have to grow much, or at all, for a population to become, abstractly, more prosperous.

    So, the question is, if GDP growth follows a slowing growth pattern, will our slower population growth be enough to offset so that we can keep close to the historical pattern?