The first thing I thought of when I read the Federal Reserve's dreary economic outlook—as contained in the meeting minutes released this afternoon (and in the chart below)—is how Barack Obama, if elected, is ever going to pass his big tax hikes on income and investment in that sort of economic climate. That slow growth would also mean higher budget deficits. To me, it seems more like a time to slash spending and taxes.
Economic Projections of Federal Reserve
Governors and Reserve Bank Presidents
(Percent)
| 2008 | 2009 | 2010 | |
|---|---|---|---|
| Central Tendency1 | |||
| Growth of real GDP | 0.3 to 1.2 | 2.0 to 2.8 | 2.6 to 3.1 |
| January projections | 1.3 to 2.0 | 2.1 to 2.7 | 2.5 to 3.0 |
| Unemployment rate | 5.5 to 5.7 | 5.2 to 5.7 | 4.9 to 5.5 |
| January projections | 5.2 to 5.3 | 5.0 to 5.3 | 4.9 to 5.1 |
| PCE inflation | 3.1 to 3.4 | 1.9 to 2.3 | 1.8 to 2.0 |
| January projections | 2.1 to 2.4 | 1.7 to 2.0 | 1.7 to 2.0 |
| Core PCE inflation | 2.2 to 2.4 | 1.9 to 2.1 | 1.7 to 1.9 |
| January projections | 2.0 to 2.2 | 1.7 to 2.0 | 1.7 to 1.9 |
| Range2 | |||
| Growth of real GDP | 0.0 to 1.5 | 1.8 to 3.0 | 2.0 to 3.4 |
| January projections | 1.0 to 2.2 | 1.8 to 3.2 | 2.2 to 3.2 |
| Unemployment rate | 5.3 to 6.0 | 5.2 to 6.3 | 4.8 to 5.9 |
| January projections | 5.0 to 5.5 | 4.9 to 5.7 | 4.7 to 5.4 |
| PCE inflation | 2.8 to 3.8 | 1.7 to 3.0 | 1.5 to 2.0 |
| January projections | 2.0 to 2.8 | 1.7 to 2.3 | 1.5 to 2.0 |
| Core PCE inflation | 1.9 to 2.5 | 1.7 to 2.2 | 1.3 to 2.0 |
| January projections | 1.9 to 2.3 | 1.7 to 2.2 | 1.4 to 2.0 |
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