I have an analysis piece in tomorrow’s paper looking at the Fed’s options if the economic outlook deteriorates quite a lot further and it needs to consider easier policy. All the signs are that we are a long way from that point at the moment. The central tendency forecast of FOMC members is still for reasonably strong growth this year and for that to accelerate in 2011.
I wrote a story in this morning’s paper on a survey that showed pervasive pessimism among American consumers about their economic situation.
71 per cent told AlixPartners, a business consulting group, that they were either worse off or in the same place as they were in May 2009 – and let’s remember that at the time the US economy was shrinking and the private sector was not generating jobs as it is now, albeit slowly, but was losing more than 300,000 positions per month.
The dispiriting survey by Alix caught my attention because it confirms that recovery is eluding most Americans, who are suffering from high unemployment and overleveraged household balance sheets. And the implications of this are huge: consumers are in no position to power the recovery once government stimulus stops later this year.
The Fed’s Board of governors has just announced 2011 chairs and deputies for 12 regional Federal reserve banks. Details are below (highlighting indicates a new face or a new role; the rest have been confirmed to existing positions):
East Asian central bankers are to meet in Sydney from Wednesday to Friday this week, focusing on international regulatory issues and inflation.
There’s plenty of common ground: East Asia has the highest concentration of rate-raising central banks in the world. Australia, New Zealand, South Korea, Malaysia and Thailand have already begun raising, and the Philippines is expected to start soon. Indonesia, Singapore, China and Hong Kong all show signs of recovery. Japan – the final member of the 11-country forum – will probably be the only participant more worried by deflation than inflation at this Executives’ Meeting of East Asia-Pacific central banks (Emeap).