Recession is easing - Fed vice chairman

[dkf]

Kohn says end could come later this year, but that central bank will do whatever it takes to boost growth.

Last Updated: April 20, 2009: 10:21 PM ET


NEWARK, Del. (Reuters) -- The deep U.S. economic recession is showing signs of letting up and of ending later this year, a top Federal Reserve official said Monday.

Recent developments "may be an early indication that conditions are falling into place for real GDP to decline at a slower rate in the second quarter and to stabilize later this year," Fed Vice Chairman Donald Kohn said in a speech at the University of Delaware.

Recovery may be gradual, however, Kohn said, and added that the Fed would not hesitate to deploy new weapons to boost growth if the anticipated rebound falls short.

"The risk that inflation could be lower will be exacerbated to the extent that economic activity falls short of the path that I have described," he said. "In these circumstances, the Federal Reserve would continue to look for ways to relieve financial pressures and encourage spending."

The U.S. central bank's policy-setting panel meets next week. At its previous meeting in March, the Fed renewed its pledge to keep interest rates very low for an extended period. It also committed to push an additional $1.15 trillion into the economy by buying longer-term Treasury securities and buying more debt and mortgage-backed securities issued by mortgage finance agencies.

http://money.cnn.com/2009/04/20/news/economy/kohn_delaware.reut/index.htm

[MADem]

1. Well, that'll piss off the GOP. nt

[ixion]

2. wishful thinking, that....

and giving people false hope.

We're still hemorrhaging jobs, banks still haven't written down the value of their assets, wages are down and the cost of living is up.

So don't give me this crap about recovery.

Pretty soon, it sounds like, this administration is going to roll out the "jobless recovery" meme that BushCo used to describe the recovery that wasn't back in 2002.

The lack of honesty is sad, and doesn't help in the long run, IMO.

[MadHound]

3. Meanwhile the leading economic indicators are still pointing South

<http://www.npr.org/templates/story/story.php?storyId=92583860>

Sounds to me like the Fed is trying to fool us, probably wanting to stimulate spending, which in a consumption based economy is absolutely vital.

Use your common sense. Do you honestly think that an economic crisis this bad can be surmounted in less than a couple of years. Hell, despite the happy-happy, joy-joy talk in the early '80s, that economic downturn lasted for five years, longer in some localized areas, and we really didn't have anything approaching a robust economy again until the late '80's

[marmar]

4. And the Fed also has some swampland in Florida it wants to sell us......

n/t