Bernanke - U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020
1 response | 0 likes
Started by metmike - June 9, 2018, 12:46 p.m.

From Bloomberg:

https://www.bloomberg.com/news/articles/2018-06-07/bernanke-says-u-s-economy-faces-wile-e-coyote-moment-in-2020


"The Congressional Budget Office forecast in April that the stimulus would lift growth to 3.3 percent this year and 2.4 percent in 2019, compared with 2.6 percent in 2017. GDP growth slows to 1.8 percent in 2020 in the CBO projections. Fed officials predicted 2 percent growth in 2020 in their March median projection.

                                            

The degree of slowdown as stimulus fades is a matter of debate among economists, with some predicting the effects could last beyond two years if the U.S. boosts its capital stock and upgrades its workforce during this period of strong growth. Congress could also write new spending laws to smooth out the program, Bernanke noted.

With the stimulus coming at a time of already-low unemployment -- the jobless rate was 3.8 percent in May, matching the lowest in almost five decades -- Fed officials have projected inflation as likely to overshoot their 2 percent target, resulting in a slightly restrictive monetary policy in the future."

Comments
By cfdr - June 9, 2018, 2:18 p.m.
Like Reply

First thought was - why is anyone still listening to that man?  (g)

We are in a corner - everyone knows interest rates need to go higher, but everyone also knows that might kill the economy and burst bubbles.

We also don't know what happens when we have a president like we have.  What does it mean when so much money wants to come to the US?  What does it mean when companies who have assumed that they need to move away now are really questioning those decisions?

Interesting times.