From the Washington Post:
"Federal Reserve leaders predict that unemployment will fall to 7.6 percent by the end of this year, and to 5.5 percent by the end of 2021, even as much about the path of the novel coronavirus and its influence over the economic recovery remain unknown.
"As the Fed concluded two days of policy meetings Wednesday, the projections suggest Fed leaders are growing more optimistic about the recovery than they were earlier this summer. By 2023, policymakers’ projections put the unemployment rate at 4 percent … At the same time, the majority of Fed officials expected the benchmark interest rate would stay at or near zero through 2023. The Fed also said it would increase holdings of Treasury securities and agency mortgage-backed securities at the current pace, which officials say is helping stave off an even deeper financial crisis."
- KC's View:
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The story also makes the point that the fed's projections don't - or can't - take into account a lot of issues that remain unknowable. Like how and when the pandemic's impacts will recede, or the potential impact of the regular flu season, or how natural disasters will impact various areas of the country, or how the election will play out.
I'm not sure you have to be an economist to have the sense that we're in unknown territory these days. Not only can anything happen, but it seems likely as if anything does happen.
