US Economy Is A `Best Bet’ To Avoid Recession.

William Poole the president of the Federal Reserve Bank of St. Louis believes that a recession will be averted and the new interest rate policy is the correct measure for the current slow down in the economy.

In a speech yesterday he declared that “the best bet is that we will not have a recession”

The economy has experienced a 0.6 percent annualized pace in the lat quarter, which is the slowest pace for five years.

Retail sales have fallen by another 0.3 percent, personal consumption are up 2.7 percent and rising unemployment has directed an air of pessimism.

Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co have all predicted a recession this year.

The Dallas Fed President Richard Fisher in his speech on the 7th February had cited that higher energy prices and continued unemployment have continued to shape the climate of uncertainty.

Fisher added that “so far, we’re standing with very sticky shoes on that slippery slope” which is exacerbated by the expectations of inflation and recession. He voted against the half-point rate cut last month due to the potential shake up of inflation.

Poole is of the opinion that businesses especially in the property market see a recession though he has argued that “they’re not in a survival mode. They’re worried about profitability. They’re not worried about survival. There is a big difference.”

Story link: US Economy Is A `Best Bet’ To Avoid Recession.