Here is what staff economists at the Federal Reserve think about where the economy is heading (via today's release of the FOMC minutes from March):
The staff's projections for real GDP in the second half of 2009 and in 2010 were revised down, with real GDP expected to flatten out gradually over the second half of this year and then to expand slowly next year as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end. The weaker trajectory of real output resulted in the projected path of the unemployment rate rising more steeply into early next year before flattening out at a high level over the rest of the year.
Me: This is no V-shaped recovery. This is an exteremly gloomy forecast. Should be fun for incumbents on Election Day, 2010. Also expect to hear calls for a second stimulus package and against raising taxes in 2011.