Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Canadian Cannabis Stocks CRASH as Canopy Growth Hits a Dead End - 14th Dec 19
Retail Sector Isn’t Dead, and These 6% Dividend Paying Stocks Prove It - 14th Dec 19
Top 5 Ways to Add Value to Your Home - 14th Dec 19
Beware Gold Stocks Downside - 13th Dec 19
Fed Says No Interest Rate Hikes In 2020. What About Gold? - 13th Dec 19
The ABC’s of Fiat Money - 13th Dec 19
Why Jo Swinson and the Lib Dems LOST Seats General Election 2019 - Sheffiled Hallam Result - 13th Dec 19
UK General Election 2019 BBC Exit Poll Forecast Accuracy Analysis - 12th Dec 19
Technical Analysis Update: Tadawul All Share Index (TASI) - Saudi Arabia ETF (KSA) - 12th Dec 19
Silver Miners Pinpoint the Precious Metals’ Outlook - 12th Dec 19
How Google Has Become the Worlds Biggest Travel Company - 12th Dec 19
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

Bernanke Keeps Door Open for Additional Stimulus on Weaker Economic Growth

Economics / US Economy Aug 27, 2011 - 02:49 AM GMT

By: Asha_Bangalore

Economics

Best Financial Markets Analysis ArticleChairman Bernanke stressed that the Fed “has a range of tools that can be used to provide additional stimulus” but he was silent on specifics. He mentioned that the costs and benefits of these options were discussed at the August 9 meeting. These details will be available when minutes of this meeting are published on August 30. He reiterated parts of the August 9 policy statement noting that “the Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger recovery in a context of price stability.”


In Bernanke’s opinion, the “growth fundamentals” do not appear to have been modified by the shocks of the last four years. Despite positive developments he sees the recovery from the crisis to be “less robust” compared with expectations. He projects an improved outlook for the second-half as temporary factors which setback economic growth in the first-half of the year have receded. He went on to add that “economic healing will take a while, and there may be setbacks along the way.” In this context he added that the Fed “will remain alert to risks to the recovery, including financial risks.”

In the near term, the Fed expects a moderate recovery to continue and strengthen over time. He noted that the Committee had marked down its outlook for the likely pace of growth over coming quarters. The FOMC views inflation to come in at or below 2.0%, such that it is consistent with the Fed’s dual mandate. Bernanke also indicated that the September 20 FOMC meeting has been changed to a 2-day meeting concluding on September 21, implying that the nature of recent economic data has raised the level of concern at the Fed.

About the long-run outlook of the economy, Bernanke does not expect the long-run potential of the U.S. economy to be materially affected by the crisis and the recession if our country takes the necessary steps to secure that outcome.”

On the fiscal policy front, Chairman Bernanke made two important remarks: First, “U.S. fiscal policy must be placed on a sustainable path that ensures debt relative to national income is at least stable or, preferably, declining over time.” Second, a gentle scolding after the recent federal budget impasse was part of the speech indicating that the “country could be well served by a better process for making fiscal decisions.”


Second Quarter Growth is a Tad Weaker than Prior Estimate

Real gross domestic product (GDP) of the second quarter was revised to a 1.0% gain from the prior estimate of a 1.3% increase. Effectively, the U.S. economy nearly stalled in the first-half of the year. A reduction of prior estimates of inventories and exports made up a large part of the downward revision. Consumer spending and equipment and software spending recorded small upward revisions but were only a partial offset to downward revisions.


Corporate profits rose 3.1% in the second quarter after a 1.0% gain in the prior quarter. However, from a year ago, corporate profits show a decelerating trend. Earnings from the rest of the world moved up 6.6% in the second quarter, while profits of domestic industries rose only 2.1%.

The outlook for the second-half of the year is sluggish growth. Auto production is likely to give a lift to third quarter real GDP growth but it is unclear if this trend will prevail in the fourth quarter. The soft performance of the economy is most likely lead to a higher unemployment rate.


Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2011 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules