Recession ends and then what?
by Tom on May 4, 2009
in Market Musings
Two Fed officials, two different opinions….
A couple of important comments:
- Policy makers must act quickly so inflation doesn’t take hold. That means when rates go up, they’ll go up fast.
- Consumer resilience – that’s a big question mark. Will the consumer go back to the free spending days of the Residential ATM machine? I don’t think we’ll see that, so I expect we’ll see a more muted recovery.
Tom Vanderwell
Two top Fed officials see recession ending this year | Reuters
NEW YORK (Reuters) – The U.S. recession will likely end this year and policymakers must be ready to act quickly to ensure inflation does not take hold when the economy recovers, two top Federal Reserve officials said on Monday.Richmond Federal Reserve President Jeffrey Lacker and Kansas City Federal Reserve President Thomas Hoenig offered slightly different views on when the world’s biggest economy will begin to grow again.
Lacker, speaking to business leaders in Charlottesville, Virginia, said that given the resilience of U.S. consumers –whose spending drives the U.S. economy — and the unprecedented stimulus injected into the U.S. economy by the Fed, he expects growth to resume by year end.
Hoenig, speaking in New York, was less confident saying the economic outlook remained “uncertain” and it would take “most of the rest of the year” to move out of recession before starting on a path of “steady, slow” recovery in 2010.
