Fed exposes fragility of US economic expansion
http://news.independent.co.uk/business/comment/story.jsp?story=551930
The increase in oil prices is, in itself, a relatively small negative
for the American economy
16 August 2004
"Output growth has moderated and the pace of improvement in
labourmarket conditions has slowed. This softness likely owes
importantly to the substantial rise in energy prices. The [US] economy
nevertheless appears poised to resume a stronger pace of expansion
going forward."
These are brave words from a brave central bank. Last week's statement
from the Federal Reserve, following its well-signalled decision to
raise interest rates from 1.25 per cent to 1.5 per cent, suggests that
it still believes - or, at least, wants us to believe - that the US
economic recovery is very much on track. There is, however, something
slightly odd about the statement, and a bit of dissection shows why.
It is a mixture of fact, assertion and simple faith.
Stephen King
http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&selm=18510aff.0406070136.712d3c51%40posting.google.com
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