8/10/11

FOMC has announced a new recession period

I do not understand the euphoria of the stock market participants yesterday. Formally, the FOMC has admitted that the US economy is sinking into a new recession period which will likely end in 2013:
“… The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013…”
There is no prospective of any economic recovery any time soon and deflation knocks the door. As we have shown in this blog the rate of unemployment will not fall below 9% with employment/population ratio fixed at 58%.
The market players should get to the point during the today’s session and the S&P 500 will be fall again.
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