The Federal Reserve has indicated it will take further steps as necessary to promote a stronger economic recovery. Sadly, the Fed’s bullets are spent, and the U.S. economy is skidding as a result of Administration missteps.
The economy is growing at less than 2%. Unemployment holds steady at 8.2% only because so many folks have quit looking for work and are no longer counted in the official tally of joblessness.
Consumer spending has slowed substantially, because Americans are pessimistic that President Obama’s economic policies will fix the economy and are hunkering down for a long siege. They are simply not convinced Governor Romney offers sufficiently effective alternatives and the personal qualities to be President.
At the conclusion of its August 1 meeting, the Federal Reserve Open Market Committee stated it “will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions…”
Unfortunately, the Federal Reserve has already pulled all the levers that might make a difference. Short-term interest rates — such as the overnight bank borrowing rate and one-month and one- year Treasury Bill rates — are already close to zero.
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