Behind the curve?

November 25, 2008

From FED statement of September 16th:

“Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters. Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.

Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities. The Committee expects inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.

The downside risks to growth and the upside risks to inflation are both of significant concern to the Committee. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.”

Showing how reckless, inept, and ad-hoc the government has been in this crisis requires no lengthy elaboration. But whether the same people who saw moderate economic growth in September, and thought that downside risks to growth and upside risks to inflation were balanced, should still be running the economy is an open question.

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