Martin Feldstein, who served on the Council of Economic Advisers during the Reagan Administration thinks we’re headed for a severe recession:
The United States has entered a recession that could be “substantially more severe” than recent ones, former National Bureau of Economic Research President Martin Feldstein said Friday.
“The situation is very bad, the situation is getting worse, and the risks are that it could get very bad,” Feldstein said in a speech at the Futures Industry Association meeting in Boca Raton, Florida.
NBER is a private sector group that is considered the arbiter of U.S. business cycles.
Feldstein said the federal funds rate is headed for 2 percent from the current 3 percent.
He added that lower short-term rates from the Federal Reserve would not have the same impact in the current downturn, in terms of reviving economic activity.
“There isn’t much traction in monetary policy these days, I’m afraid, because of a lack of liquidity in the credit markets,” he said.
Well isn’t that just swell.
