Fed officials worried over rate cuts

By Duru

June 21, 2001


If true, this article reveals what I have been saying all along. In trying to cheerlead the economy to a quick recovery and "soft landing," the Fed has been way too optimistic on the effects of its rate cutting and thus the prospects for economic recovery. I now am beginning to believe that part of the desparation of the Fed has been because Greenspan is close to retirement, and he is loathe to go out on a recessionary note. His legacy would be permanently scarred if the Fed fails here. However, I have to give them credit for pumping the economy hard and fast just as "The Internet Depression" recommended to keep the bubble burst from spiralling the economy downward into a serious mess.

Of course, much of what I have been saying has been gleaned from plenty of external sources. The evidence is everywhere. The optimists often choose to ignore the real data and focus on what "historically" should happen.

Going forward, pay close attention to how the window for economic recovery continues to shift as the pundits, economists, the Fed, etc... prognosticate on the economy. I am still thinking 1st half of 2002. And a SLOW recovery at that.



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