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December 4, 2008 10:34:54 AM CST

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Fed's 3-Year Outlook Is Gloomy

Posted Nov 21, 07 12:23 PM CST in Business 

(Newser) – In a word: Grim. That’s the crux of the Federal Reserve’s economic outlook for the next three years, with 1.8% to 2.5% growth forecast for 2008 and a slow gathering of momentum in 2009 and 2010, the Financial Times reports. And key factors from credit surprises to unexpected fourth-quarter losses in the stock market could send the economy spiraling.

Inflation, the Fed said in its inaugural economic forecast, will stay below 2%, and unemployment will peak near 4.9%. Minutes from the Fed’s October meeting showed officials reluctantly cut rates last month, calling the .25% reduction “additional insurance,” indicating it was reluctant to cut rates again. The dollar fell against the yen and strained toward new lows against the euro.

Source Financial Times (UK)

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The New York Stock Exchange is seen on Thursday, Nov. 8, 2007. Stocks extended their losses Thursday after Federal Reserve Chairman Ben Bernanke warned he expects a raft of economic troubles will cause...   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke discusses the economic outlook while testifying on Capitol Hill.   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke speaks at the CATO Institute's annual Monetary Conference, Wednesday, Nov. 14, 2007 in Washington. (AP Photo/Caleb Jones)   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Thursday, Nov. 8, 2007, before a Joint Economic Committee hearing on the economic outlook. (AP Photos/Susan Walsh)   (Associated Press)
Federal Reserve Board Chairman Ben Bernanke discusses the economic outlook while testifying on Capitol Hill.   (Associated Press)
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