Where the Fed Thinks We're Going

All the way back in mid-December when the Federal Open Market Committee met (ie - the Fed's leaders) to discuss the economy and eventually lower the Fed rate to basically 0%, they also mapped out what they thought 2009 would look like.

Here's why you care: First the Fed is often right (we'd say on the money, but you'd alt-cntrl-delete out of our blog), but second even if they are not right the actions they took and are going to take are based on what they think may happen. In other words, you need to understand their thinking. Yesterday, the minutes were released from that mid-December meeting. Thankfully, there's solid reporting out there so you don't have to wade through them. We suggest taking two minutes and reading the Washington Post's Neil Irwin's story because he keeps it forward looking - which is (as always) where we think you should be.

Examples of why you care: The minutes show the Fed leaders seeing the first half of 2009 experiencing a fair amount of pain before a recovery starts. But, there's also concern that the global problems are deep enough to continue the pain. Care now? Another example is the Fed's plan to buy bundled mortgages (ie- mortgage securities) in the hopes of pushing down mortgage lending rates (which has started). Care now?

We thought so... Go check out Neil Irwin's piece and understand what the Fed is thinking and doing in the coming months.