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What are the predictions for the economy from Martin Feldstein, professor at Harvard University? Feldstein is a member of the President's Economic Recovery Advisory Board and a noted economist.
First and foremost he sees the risk of a "double dip" recession. He is looking for a stable third quarter, after which time there could be some bad news, causing a slide in the fourth quarter.
Feldstein said: "There isn't going to b enough to sustain a really solid recovery." even though we've had some "good news" lately.
By the fourth quarter, the effects of the stimulus package will have worn off and there will be little to kick start the economy to the next level.
He goes on to say that Ben Bernake has done a good job and should be reappointed.
As this is being written, we are hearing from Chairman Bernake on the status of the economy which he says is improving and reaching a bottom. He is defending his actions to print piles of new money and said that he will rein in the money supply when the time comes. He also says that interest rates will remain low into the foreseeable future.
Quiz: How will you know when the recession has ended? Answer: When the Fed starts raising interest rates. Always keep an eye on what the Fed is doing and saying.
When do you believe that interest rates will start to rise?
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Reader Comments (Page 1 of 1)
7-21-2009 @ 8:14PM
cabo79 said...
With the Gov. loaning money to the banks, they have little incentive to dispose of bad assets at the current market value. They seem to be waiting for the bubble values to magicaly reappear. I am looking for a Japan type recovery, 10 to 15 years away.
7-21-2009 @ 10:17PM
chex781391 said...
When the stimulas wears off? What are you clowns saying? I've seen no inprovement and still jobless. The stimulas, 0% Money and all the Bail-Outs have not reversed the crisis. Unemployment according to goverment figures is at about 10%, but more like 18%+.. The goverment will soon run out of money, and lack of income tax payers, and when that happens the Bankers will finally loose their strangle-hold on the worlds economy..
7-21-2009 @ 10:51PM
william lindblad said...
The question is when will interest rates begin to rise?
January will be an interesting month. By than there should exist a rather conflicting problem of inflation/deflation. It is with us at the present but in a form that the disparity gap is minor. One has to keep in mind that the government has there own definition which is "core" and "other". Simply put, this means that fuel & food are in one category and everything else another. I guess another way to put this would be the things that all of use, or depend on, every day are put in a special category and not considered inflationary.
Fixing your car's transmission or buying a new fridge. Getting a new ipod or any repair work on your house (if you still own one) are the real examples of cost science. Damn, 4 buck a gal. gas was NOT inflationary. I must be a moron. I must have a lot of company.
You see people, it is more a game of the compiliation of facts and statistics that makes this watch tick. Trouble is, all of this can be twisted to make dreams come true.
I have to go with Feldstein. While he does not put it quite in my view, he is similar enough. We are on a plateau and everything is reasonably stable. Please keep in mind that a plateau is usually a flat geographic object with very steep sides.