Thursday, September 13, 2012

Fed Forecasts Unemployment to Remain High

Fed: Unemployment won't reach 7% until 2014 says this:

"The Federal Reserve's forecast for unemployment assumes new policy basically won't do much for two years. The Fed is forecasting the unemployment rate will fall to a range of 7.6% to 7.9% in 2013 and to a range of 6.7% to 7.3% in 2014, from 8.1% in August. The Fed also for the first time forecast 2015 levels, when it sees the unemployment rate falling to a range of 6% to 6.8%. Federal Reserve members have shifted their thinking of when the first rate hike would be appropriate to 2015, according to the latest assessments released Thursday. There are now 12 of the 19 Federal Open Market Committee members -- including those that don't have a vote this year -- who think the first hike will be in 2015; in June, only 6 felt 2015 was the correct time."

Summing Up

It very well could be circa 2020 before we see unemployment dropping to the 5% range again. 

And due to the struggling economy, interest rates may very well remain at extremely low levels through 2016 or so, too.

Sad but true.

Thanks. Bob.

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