In a previous post on iProceed blog, we had mentioned that there are several encouraging indicators for the 2004 holiday season. iProceed has, however, not yet lifted its warning on a recession in 2005.
It was, therefore, encouraging to read a relatively positive statement from the Fed. In simple words, this is what Fed is saying:
It was, therefore, encouraging to read a relatively positive statement from the Fed. In simple words, this is what Fed is saying:
- Everything is in place for moderate economic growth in the future.
- There is only moderate risk that higher economic growth may lead to inflation.
- Fed will act as and when economic conditions change.
- Since only moderate growth is expected, expect only a modest, but gradual, increase in interest rates during next 12 months.
- If Fed's monetary policy leads to low inflation, it is good for everyone, particularly in light of rather unusually high energy prices and expectations that taxes will go up in 2005.
- Assess the impact of higher interest rates on your business and develop a strategy accordingly.