Back of the envelope analysis:UE rate is now 6.7%.Almost certain to rise over next couple of months.Probably at 7% early in '09.The most optimistic estimates have recession ending about halfway thru '09.Stimulus program heavy on public works will be slow to implement.In recent recessions, UE has continued to rise for at least a year afterward.So a fairly optimistic scenario would have UE rising to 8% by YE '09 and staying there for a year.
On Dec. 18, the Federal Reserve announced it would taper its monthly purchases of Treasury and mortgage bonds, a stimulus program intended to keep rates low and lending activity up. As expected, interest rates rose, with 30-year mor... Read Post
Is the Fed Getting Ready to Tighten? Officials say no. But there’s a lot of speculation that the rise in the discount rate presages further action. Let’s hope that this is wrong. It’s worth noting that after the 2001 recession, the ... Read Post