That’s what the president of the Federal Reserve Bank of Philadelphia thinks – Charles Plosser thinks if we can just get through the first half of the year things will start to turn around. However, that said, his views weren’t particularly optimistic. According to the Associated Press, Plosser thinks the housing market will bottom out in 2009.In turn the financial markets will start to recover, helping to apply the brakes on the overall downward plunge. But he said this still stands to be a prolonged recession. And while employment figures to be dicy for awhile yet, he at least thinks it will avoid double-digit territory.
Much of Prosser’s discussion focused on the presence of central banks in the economy in place of private-sector financial institutions. He called for gradually increasing Federal Reserve borrowing rates to encourage both lenders and borrowers to return to the private market.
RBR/TVBR observation: The nation is not split 50-50 on the economy – we all want it to work, and if everybody is pulling more or less in the same direction, maybe we can defeat all the bleak forecasts. A big key will be to keep people working, so they can keep spending. Perhaps a strong job-creation program can add a little rosiness to Plosser’s outlook.