Wednesday, July 14, 2010

FOMC Minutes: Forecast revised down

by Bill McBride on 7/14/2010 02:00:00 PM

From the June 22-23, 2010 (and May 9th) FOMC meeting.

The Fed revised down their forecasts:

Economic projections of Federal Reserve Governors and Reserve Bank presidents
 201020112012
Change in Real GDP3.0% to 3.5%3.5% to 4.2%3.5% to 4.5%
  April projection3.2% to 3.7%3.4% to 4.5%3.5% to 4.5%
Unemployment Rate9.2% to 9.5%8.3% to 8.7%7.1% to 7.5%
  April projection9.1% to 9.5%8.1% to 8.5%6.6% to 7.5%
PCE Inflation   1.0% to 1.1%1.1% to 1.6%1.0% to 1.7%
  April projection1.2% to 1.5%1.1% to 1.9%1.2% to 2.0%
So the Fed expects slower growth, higher unemployment and less inflation. The big change was the increase in the forecast unemployment rate for 2011 and 2012.

Unfortunately, I'll take the under on GDP growth and inflation, and the over on the unemployment rate.

On further stimulus:
[M]embers noted that in addition to continuing to develop and test instruments to exit from the period of unusually accommodative monetary policy, the Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably.
That is it.