Fed outlook mixed — huge surprise
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The economy is recovering — but it isn’t. This is essentially the Federal Reserve Bank of San Francisco’s (FRBSF) most recent mixed message on the state of the economic recovery.
A rather stale and well-tread outlook on the economy and monetary policy is offered in the FRBSF’s July Economic Letter, as sound and reasonable as it is. Essentially, the economy is recovering, but at a snail’s pace. Here are the reasons why:
- government fiscal policy (raising taxes, cutting spending) is threatening continued growth; and
- instability in the Eurozone, coupled with stagnating austerity measures, continue to put the brakes on the U.S. economic recovery.
While the FRBSF insists the economy is growing, inflation is stable and near target and GDP is set to grow around 2%, they also admit that this growth is not robust enough to meet their mandate of full employment and stable pricing.
What’s to be done? A continuation of Operation Twist, the Fed’s creative bond buying program designed to lower long-term interest rates, and another possible round of quantitative easing to inject more cheap cash into the banking system and encourage consumer lending.
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About The Author
Jeffery Marino
is an assistant editor and lead on our first tuesday news alerts, specializing in critical economic analysis and its impact on California’s real estate market.
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Hello F.T.
I’ve been a Realtor for 37 years. Your suggestion that the fed just print money is rediculous. If you want to turn the real estate market around you need to do something about corrupted Realtors and agents in this country. I highly recommend the adoption of Article 18 of the code of ethics. “Realtors shall not knowingly or recklessly practice business with buyers and sellers or any entity to harm and take advatage of lien holders or third parties of interest in the listing or purchase of Distressed Real property. Realtors shall keep third parties with interest in distressed real property informed in writing of any status or activity Realtor is performing in marketing of distressed property, which shall be for the best prince and terms.” This along with the a list of standard of practices for members and distressed real estate being defined.
Has a past local V-P and President of the Board of Realtors, and also director over 25 years this industry makes me sick because of the corruption we now of our members, even some leaders.
Sincerely, Glenn A. Stull cell 951 316-3843
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I must admit to the same feelings as Glenn Stull has. It is really disappointing and down right discouraging to see ones peers make a few bucks by purposely ignoring the code of ethics. The whole country seems to ignoring any code of ethics. Fair dealing and honesty seem to be lost forever to a world of hype, manipulation, and lies.
We have all read the stories of corruption, theft, and any other criminal act one could possible think of; that goes on in all businesses including our, should be exemplary, government on all levels. What would happen if all the illegal money that changes hands became legal? Would the employment numbers change a lot? Would the money be used to pay the nation’s debt? Nice thought.
However, to the point of First Tuesday obvious sarcasm toward the Federal Reserve Bank of San Francisco, my home town; just because growth is not happening as those in power want; there is some growth. I’m far from a economist or an astute financier, but a steady 2% growth rate for now doesn’t seem like a bad goal. I don’t know how to create more jobs, but manufacturing sure could use a kick in the butt and bring a lot of job stability back to our shores instead of outsourcing. And, with the proper funding, solar energy seems to be a fast way to create jobs. Is the oil industry fighting this effort? It seems like solar jobs, as promised by the democrats during the last presidential election, could have been started by now. Of course, holding one to one’s promise is useless. Empty promises are a sign of the times.
But, back to Glenn’s theme; the economic troubles we are in are not only the fault of programs the government, made up of our elected leaders (Good Grief did we really elect that idiot!!) should initiate, but bad behavior that should be eliminated. Can any group unite and change “the system.” I would like to meet the person who would be willing to fill those shoes.
The economic trouble we are in is the fault of our leaders because they have the power to act and effectuate change. To quote Leonardo Da Vinci, “Many have made a trade of delusions and false miracles, deceiving the multitude.”
But, the government is not solely to blame and to quote Leonardo again, “Blinding ignorance does mislead us. O! Wretched mortals, open your eyes!”
Can you tell I just read “The Da Vinci Code” by Ted Brown? It was a good way not to think about the lack of jobs and our penchant for a lack of honesty.
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Seems to me flippers are doing all the buying and selling to investors. The property is rehabbed, and then relisted for $100k+ than it was sold just a few months before. This seems to be happening with short sale listings. Most are placed on hold or cancelled within a few days of listing. Suddenly, I see it being rehabbed. What a joke. Seems all that money swashing around in the economy is finding it way back into RE. Here we go again, another bubble – except there will ne nothing to save us this time. (It’s the same money pumping up stocks. ) Except it is the investors left holding the bag this time. Does a paint job, cheap carpet and llminatelaminate flooring justify a 100k price hike? I’m starting to see these rehabs sit on the market, even after 50k price reductions. Too much hype, its all hype. I don’t see how the price surge is justified when there are insufficient serious end users out there. Hype.
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