- If economy continues on track indicated by recent data, policy premises underlying forecast become “untenable”
That is a Greenspan-worth muttering that means the Fed will do more if data doesn’t improve ASAP.
- Fed may need to “respond more aggressively”‘
- Regional business contacts have shifted from optimistic to cautious
- Concerned that jobs problems may become structural
- Stakes in FOMC decisions now very high
- Expectations about what further mon pol can accomplish should be modest
Translation: the economy is starting to stink and if it continues, there isn’t much we can do. A touch of USD weakness on the dovish comments.
