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U.S.Economy: 
Fed Lifts Economic Views
Author: 123jump.com Staff
123jump.com
Last Update: 7:08 AM ET November 24 2009


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The members of the rate setting committee estimated economy to shrink at 0.25% annual rate in the fourth quarter of 2009 and then expand at 3% in the same quarter in 2010. The committee now projects the economy to grow at 2.5% to 3.5% in 2010 and shrink between 0.1% and 0.4% in 2009.

 
Because current conditions may differ from those that prevailed, on average, over history, participants provide judgments as to whether the uncertainty attached to their projections of each variable is greater than, smaller than, or broadly similar to typical levels of forecast uncertainty in the past as shown in table 2. Participants also provide judgments as to whether the risks to their projections are weighted to the upside, are weighted to the downside, or are broadly balanced. That is, participants judge whether each variable is more likely to be above or below their projections of the most likely outcome. These judgments about the uncertainty and the risks attending each participant''s projections are distinct from the diversity of participants'' views about the most likely outcomes. Forecast uncertainty is concerned with the risks associated with a particular projection rather than with divergences across a number of different projections.
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