Fed

Fed Beige Book Says:

• economic recovery slowed in some areas
• economic activity ‘continued to increase’
• some fed districts reported ‘modest’ increases in economy
• most districts reported ’sluggish’ residential real estate
• credit conditions were ‘tight’ in most districts
• labor markets ‘improved modestly’ across regions
• wage pressures were ‘contained on whole’
• manufacturing expanded, while some districts noted slowing

• says:
• risks to growth are weighted to the downside
• economic outlook remains unusually uncertain
• fed continues planning for withdrawing accommodation
• speaks to senate banking panel in semiannual testimony
• asset sale decision to hinge on employment, inflation
• fed over long term to cut assets to more normal size
• reiterates rates to stay low for ‘extended period’
• fed sees continued moderate growth over several years
• fed prepared to take more policy actions ‘as needed’
• significant time needed to recover 8.5 million lost jobs
• fed expects ‘gradual decline’ in unemployment rate
• fed sees ’subdued inflation’ over next several years

Good Morning:

• FOMC didn’t see need for additional ‘policy accodation’
• some fed officials saw risks to outlook ’shifted downside’
• officials saw prices likely to stabilize in coming quarters
• some fed policy makers saw risks to outlook ’shifted downside’
• some fed policy makers saw ’some risk of deflation’
• fed policy makers ‘revised down modestly’ outlook for inflation
• FOMC expected ‘pace of hiring to remain low for some time’
• FOMC saw house prices remaining flat or declining in near term
• about half of the FOMC saw risks of growth having moved to downside
• Fed officials see ‘11 GDP growth at 3.5%-4.2% VS.
  

US Chairman of the Federal Reserve Ben Bernanke will be addressing the economy this morning at 10.

-Inflation will remain subdued for sometime
-European debt crisis is likely to have only a “modest” impact on the US economy as long as Wall Street Stabilizes
-”The economy… appears to be on track to continue to expand through this year and next”

- Cant Rule out Double dip recession entirely

• Too big to fail has upside of preventing contagion
• Europe’s debt crisis may weaken global recovery and impair U.S. financial markets
• Recovery generally remains on track
• “thinks government guarantees are playing a major role here”
• “Let me also stress that the current agreement in Europe does buy substantial time for European governments to enact fiscal retrenchment programs”

Leading Indicators:    Survey: 0.2%     Actual:  -.1%    Prior:  1.4%    Revised:  1.3%

Philadelphia Fed:     Survey: 21.3      Actual: 21.4      Prior:  20.2

 FED PRICES-RECEIVED 3.5 VS 1.0 last month
 FED EMPLOYMENT INDEX 3.2 VS 7.3 last month
 FED PRICES-PAID INDEX 35.5 VS 42.7 last month
 FED NEW ORDERS INDEX 6.1 VS 13.9 last month
 FED FACTORY INDEX 21.4 VS 20.2 last month

The pieces of the report are a little less encouraging with New Orders index down and the Employment index also lower from the prior month

Feds Plosser says recent developments in Greece a risk to the United States Economic forecast, renewed financial market turmoil could retard United States recovery.