The Federal Reserve sees a rough 2009 ahead:
The Federal Reserve cut its economic outlook for 2009 on Wednesday and warned that the United States economy would face an “unusually gradual and prolonged” period of recovery as the country struggles to climb out of a deep global downturn.
In gloomy economic projections released by the central bank, the Fed’s Open Market Committee said it expected that the economy would contract by 0.5 percent to 1.3 percent this year, that unemployment would rise to 8.5 to 8.8 percent and that inflation would remain under greater pressure.
Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates “more than offset” any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook.
“Financial markets continued to be strained over all, credit remained unusually tight for both households and businesses, and equity prices had fallen further,” the Open Market Committee said in the report, which reflected the minutes of its Jan. 27-28 meeting.
Hold on folks, this ain’t over yet.
