No V-shaped recovery, Kohn says. The economy will operate well below potential for some time and declines in inflation are a bigger risk than inflation for a while. Unemployment could reach 10% by early 2010 and the recovery will be moderate, strengthening “some” in 2010, he says.
While the comments were dovish, EUR/USD looks as though it saw a ghost at the 1.4860 level as prices quickly slumped to 1.4805 where we trade now.