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Economic Outlook & Policy Strategies: Addressing Dual Mandate Challenges

A comprehensive analysis of the current economic situation, underemployment, inflation stability, and long-term unemployment, highlighting challenges and policy responses. Sources include Federal Reserve data and expert opinions. Policy goals focus on maintaining price stability while stimulating labor market improvements. This proposal aims to provide crucial insights and guidance for addressing economic headwinds and boosting investor and business confidence amidst macroeconomic risks.

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Economic Outlook & Policy Strategies: Addressing Dual Mandate Challenges

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Presentation Transcript

  1. Proposal to the FOMC

  2. Current Economic Situation & Dual Mandate Performance

  3. Source: Bureau of Economic Analysis; Congressional Budget Office

  4. Underemployment & Unemployment Elevated Source: Bureau of Labor Statistics

  5. Long-Term Unemployment Especially Problematic Source: Bureau of Economic Analysis; Congressional Budget Office

  6. Inflation Remains Stable Source: Bureau of Economic Analysis; Federal Reserve

  7. Inflation Expectations are Well Anchored Lehman Brothers Bankruptcy Source: Federal Reserve; Federal Reserve Bank of Philadelphia

  8. Dual Mandate Performance

  9. Economic Headwinds

  10. Source: Thomson Reuters/University of Michigan

  11. Investors Lack Confidence in Corporate Debt Source: Board of Governors of the Federal Reserve

  12. Businesses Lack Confidence in Recovery Prospects Source: Bank of America Merrill Lynch, Board of Governors of the Federal Reserve

  13. “Fiscal Cliff” Poses Broad Macroeconomic Risks Source: Congressional Budget Office

  14. European Debt Crisis Under Control, For Now Source: International Monetary Fund

  15. Source: Bureau of Economic Analysis

  16. Source: Census Bureau

  17. Source: Board of Governors of the Federal Reserve

  18. Source: Standard & Poor’s

  19. Conclusion

  20. Current Fed Policy: “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.” Source: FOMC Statement, October 24th 2012

  21. Our Policy: “If the unemployment rate remains above 7% and core inflation remains below 3%,the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy toolsas it sees fit. ”

  22. Policy Goals:

  23. Further Guidance Occurs If:

  24. Inflation will remain controlled

  25. Summary:

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