Fed: Risk of Recession “Quite Low”

According to William Dudley, the president of the Federal Reserve Bank of New York, the risk of a double-dip recession is still quite low.
Dudley said that only some of the the restraints on growth, such as high oil prices and Japan’s earthquake in the first half of the year, can be considered temporary.
“The risks have risen a little bit, but I think we very much still expect the economy to recover. We expect … growth to be significantly firmer than it was during the first half of the year,” he said. “But obviously there is some concern.
The central bank’s policy-setting Federal Open Market Committee (FOMC) took the unprecedented step last week of promising to keep interest rates near zero for a set period of time-at least until mid-2013. The Fed also said it was weighing other options to help strengthen a weak recovery.
Dudley said that market interest rates fell after the announcement, “which should help provide some additional support for economic activity and jobs.” The president of the New York Fed has a permanent voting position on the FOMC and plays a prominent role within the U.S. central bank.

I don’t know how Mr. Dudley arrives at the is in my opinion unrealistic conclusion.  The number one thing that drives you into or out of a recession is job growth.  When your are loisng jobs you risk a recession. On the other hand, when you are creating jobs you have a recovery.

Nothing that this administration has done has created jobs. On the contrary we have been losing jobs and unemployment claims have held steady at the 400,000+ level on a weekly basis. You cannot have a sustained recovery with that high of weekly unemployment numbers.

Mr. Dudley can blame oil prices, tsunamis, or any other red herring he wants. The fact is we have no leadership by the Fed, the President, or the Senate in creating an environment to spur job growth.

Just because you happened into a Fed Chair doesn’t make you smart – remember the FED has missed on the Tech-Bubble, the Housing Bubble, told us the Sub-Prime Crisis was “contained”, and lastly faovred the stimulus that has been the biggest boondogle known to man.

Don’t count on the FED for knowledge.

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