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SUNDAY, NOVEMBER 8, 2009
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Fed Sees Recession Lingering Through '09

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(Newser) – The Federal Reserve anticipates the recession will continue through 2009 despite its recent rate slash and other planned “nontraditional policies,” the Wall Street Journal reports. Minutes of the Fed's December 15-16 meeting, at which it cut rates to nearly zero, indicate a deep pessimism about the economy. Officials expect the unemployment rate to keep rising as the GDP contracts.

“Rates are going to be low for a long time,” a former director of the Fed’s Division of Monetary Affairs tells Bloomberg. “They see the economy as extremely weak. It is a dark document.” The central bank also intends to strengthen its balance sheet and use cash, not just interest rates, to stimulate the economy.

Lower prices, once welcome, could be a signal of economically dangerous deflation.
Lower prices, once welcome, could be a signal of economically dangerous deflation.   (AP Photo)
Federal Reserve Chairman Ben Bernanke.
Federal Reserve Chairman Ben Bernanke.   (AP Photo)
A trader watches the board.
A trader watches the board.   (AP Photo)
Treasury Secretary Henry Paulson holds a press conference with Federal Reserve Chairman Ben Bernanke and other top monetary officials.
Treasury Secretary Henry Paulson holds a press conference with Federal Reserve Chairman Ben Bernanke and other top monetary officials.   (AP Photo)
Graphic shows what the Federal Open Market Committee does.
Graphic shows what the Federal Open Market Committee does.   (AP Photo)
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Newser001
Jan 6, 09 5:18 PM CST
Some economists predict perhaps 2012 or longer... This is some serious sh*t we find ourselves in. Reply
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