The November 3 to 4 Minutes of the FOMC meeting are now out, and as you have been told over and over (and over and over)…. It has the flexibility to keep rates low for an extended period. But what is of interest is the new FOMC outlook figures for what lies ahead in unemployment targets.
The inflation forecast has come down a bit and GDP forecasts are up a bit. GDP for 2009 was raised to -0.4% to -0.1% for the year, up from -1.5% to -1.0%. For 2010 that figure has been moved to +2.5% to +3.5% from a prior range of +2.1% to +3.3%. The 2010 PCE inflation was raised to +1.3% to +1.6% from +1.2% to +1.8%.
But for 2011, the FOMC is targeting real GDP at a range of 3.4% to 4.5%, down from a prior 3.8% to 4.6%. Maybe they figured out that higher taxes will slow the economy.
The core inflation rate for 2010 is still +1.0 to +1.5%. But the average for US unemployment has now been targeted at 9.3% to 9.7%, down from a prior target of 9.5% to 9.8%. The new range for 2011 unemployment is 8.2% to 8.6%, down from 8.4% to 8.8%. It also gave a 2012 forecast of 6.8% to 7.5%.
While the data was before the official unemployment crossing above 10%, it is probably a safe bet that they had that data at least on a rough and preliminary basis.
You can read the rest at the FOMC site.
JON C. OGG
NOVEMBER 24, 2009
Top Gaining Stocks
Top Losing Stocks