Fed sees economy slowing in 2008

http://money.cnn.com/2007/11/20/news/economy/fed_outlook_analysis/index.htm?postversion=2007112014 ^ | 11-20-07 | Paul R. La Monica

[Hydroshock]

NEW YORK (CNNMoney.com) -- The Federal Reserve said that the decision to cut a key interest rate last month was a "close call," according to minutes from that meeting released Tuesday.

But in a new economic outlook, the central bank also lowered its growth target for the economy in 2008, raising hopes that the Fed will cut rates again when it meets in December.

The Fed indicated in an addendum to its minutes that it now expects the economy to grow at about a 1.8 percent to 2.5 percent rate next year, down from a forecast in June of 2.5 percent to 2.75 percent growth.

"I am surprised that their forecast for next year is as low as it is," said David Resler, chief economist of Nomura Securities International Inc. "The forecast is considerably weaker than it had been and that is the most significant development in this report."

And while Resler said he does not think a rate cut at the Fed's next meeting on Dec. 11 is a foregone conclusion, he thinks it is more likely now given what the Fed thinks about the prospects for the economy in 2008.

[Hydroshock]

Economy/Credit/Housing Issues Ping List

If you want on or off this list let me know.

[Toddsterpatriot]

The Fed indicated in an addendum to its minutes that it now expects the economy to grow at about a 1.8 percent to 2.5 percent rate next year

That doesn't sound like a recession. Hydroshock is deeply saddened.

[Orange1998]

I notice you post right behind him. Are some stalker or something. LOL

[Moonman62]

Nope, but Fannie and Freddie are both down 25% today after a month of declines. That should help cheer him up.

[Nervous Tick]

>> That doesn’t sound like a recession.

Excellent!

Then the Fed won’t need to cut rates to bail out the speculation industry (of which I surmise you are a part).

Fantastic news!

[DustyMoment]

So, I guess we’re in the preliminary round of the recession, now!!

I am constantly amazed at the uselessness of the Fed Chairman. The message I’m getting from Bernanke is “Well, I lowered interest rates and THAT didn’t fix the economy so, what else am I supposed to do??”

I guess now that we have been through a few rounds of interest rate lowering, all Bernanke has up his sleeve is to warn us that a recession is coming.

Thanks, Ben, most of us could see that for ourselves. How ‘bout doing something useful . . . . . . like trying to PREVENT it . . . . . . you know, something actually USEFUL!!!

[meyer]

...raising hopes that the Fed will cut rates again...

Yeah - and hopes that the dollar gets devaluated even more. Nothing like $4.00 per gallon gas to get the economy going.

[Toddsterpatriot]

Since it’s his thread, every post is behind him. Your post is behind mine, stalker. LOL!

[ex-snook]

The answer isn’t reduce interest rates, it’s increase interest rates. Making borrowing more expensive will encourage business to make money the old fashioned way - earn it with production.

[Toddsterpatriot]

The answer isn’t reduce interest rates, it’s increase interest rates.

Tank the economy, at least your CDs will pay more.

[Neidermeyer]

The Fed indicated in an addendum to its minutes that it now expects the economy to grow at about a 1.8 percent to 2.5 percent rate next year, down from a forecast in June of 2.5 percent to 2.75 percent growth.
******************************************
Is that 2%+ gdp forecast in current dollars or in inflation ravaged dollars and actually representing a 6% or so decline?

[expat_panama]

It never ceases to amaze me how these people can post doom'n'gloom from the ClintonNewsNetwork and call it an "Economy/Credit/Housing Issue".  Anyone can see the what the fed minutes actually say on their own web source here, and where CNN says "Fed sees economy slowing" the Fed is actually saying--

--economic activity expanded at a solid pace in the third quarter. Consumer spending rose more strongly after a tepid increase in the second quarter, and the pace of expansion of business outlays for equipment and structures remained reasonably solid. Manufacturing posted a sizable gain for the third quarter as a whole.

[ex-snook]

Putting the interest rate at 0 would not improve the economy. Putting our trade deficit at 0, would. We buy from you, you buy from us.

[BurbankKarl]

ping to Captain Obvious.

[Neidermeyer]

At the close ..

FNM $28.08 -9.50
FRE $26.52 -10.98

[LowCountryJoe]

Those friggen Japs Chinks are taking are jobs and are money...hollowing out America...giant sucking sounds (oh, wait, that just me in the fetal position with my thumb in my mouth).

[Toddsterpatriot]

Putting the interest rate at 0 would not improve the economy.

Neither would raising them to 6%.

Putting our trade deficit at 0, would.

When we finally go into recession, the trade deficit will decline. Of course, in a recession, interest rates will be cut. LOL!

[ex-snook]

"When we finally go into recession, the trade deficit will decline."

Nah, it won't. We will just borrow some more money from China to pay for what we are buying from them. When China cashes in our Treasuries and uses the dollars to control USA companies, then we will have the recession.

[Toddsterpatriot]

Nah, it won't.

Yeah, it will.