The Fed Considers Deflation To Be Of Little Risk And Expects Recovery In 2011
Despite evidence that the pace of economic recovery “remained dormant” by the third quarter, the Fed staff and board members alike turned to predict that the recovery will accelerate in 2011, according to the minutes.
“After considering the available information, the participants expected that the recovery again and continue to gather strength in 2011, according to minutes.
However, most board members acknowledged that the economy is much weaker than previously thought and believed that the growth would be more “modest” than they had predicted at the committee meeting in June.
The figures were weaker labor market than many board members had anticipated. Among the factors that are depressing employment figures discussed by the authorities, several board members indicated that their business contacts cited the “uncertainty to future taxes, regulations and costs of health benefits” as a reason they were reluctant to hire staff.
In general, board members agreed that the outlook for inflation shows little change which is good news for penny stocks for dummies traders. They considered that the risk of deflation is “very small”, according to the minutes, although some indicated that the risk of further disinflation has increased slightly.
One participant noted a caveat, noting that surveys of inflation expectations in the long run in Japan have remained positive despite the fact that this country has experienced deflation. A few officials warned that the continuation of the “exceptionally accommodati
