Goldman sees the US economy growing at only a 1.5% pace through the end of 2010 and rising only 1.9% in 2011 from a prior 2.5% forecast. Unemployment is expected to rise to 10% by the beginning of 2011, they say.
The Fed will adopt QE Lite next Tuesday, though it is a close call, they say. The Fed will embark on a full-fledged second round of quantitative ease toward the end of the year, Goldman’s economist says.
The forecast was one reason for the sharp slide in equities earlier this morning, traders said.
