The Fed is to recover the economy
There were a lot of talks recently concerning the fact that the Federal Reserve will not decrease interest rates anymore. However nothing is clear and exact and many experts are not sure that this will turn to be so. But the previous Friday eliminated all those thoughts when quite positive jobless rate report was issued that caused Forex markets suggest that situation occurred in the United States may turn to be not so bad.
No officials have still admitted the fact that there is a recession in the United States economy. And all traders have divided about this fact. Several of them suggest that in case there will be a recession in the USA it won’t turn to be dangerous and painful. The rest of them think that the country’s economy is already in a recession but it will cease soon without any negative consequences.
FOMC officials made no clear announcements concerning their interest rates plans on Wednesday but the Friday’s data provides the possibility to consider the forthcoming reports’ numbers and makes us to suggest when the country’s economy will finally recover.
In case we have such jobless report several weeks ago we would probably even do not consider any possibility of the positive shift in the economy. But from the current point of view, when the Euro/USD growth has finally stopped we can say about positive trend in the economy.
So the Federal Reserve managed to overcome the credit crisis and decline of the economy. However the problems at the housing sector as well as in food and energy industries still remain and the level of the consumer confidence keeps low positions. The possible way out for the Fed is to bring the housing sector back to life which will cause the positive shift in the consumer confidence index. Therefore we can say the Federal Reserve needs to recover the country’s economy without causing any inflation.
