The Fed expects a recovery to above-trend annual GDP growth faster than 3%.
Truth : First half growth looks closer to 1.5% for 2012. In 2011, it is 1.7%.
Looking into US Fiscal cliff, basically it is tax cuts and spending cuts under Bush administration which might cut GDP off(4% Wall street article) ,(roubini say 4.5%). whichever it is ,it is hard to see how USA can expect a recovery for 3% for rest of 2012.
Would a Qe3 be effective while other nations also carry out quantitative easing? Things might be clear when we get the minutes of 31 aug Jackson hole meeting where Ben Bernake famously unleash QE package.
Comments welcome.
Regards
Pipsfarmer.
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