I had the pleasure of attending the Simon School's Annual Economic Seminar yesterday. I enjoyed Federal Reserve Bank of Philadelphia President Charles Plosser's thoughts and perspective. Mr. Plosser gave a fairly subdued yet constructive outlook on the nation's economy. He believed the U.S. would not find it's way into recession this year, he believes the nations GDP will track at a 3% growth rate. He feels the housing market will stabilize , however, does not foresee robust growth. All in all, my sense is he is in the "muddle along " camp.
I thought the most interesting points Mr. Plosser made were in reference to his interpretation of current and future Fed policy decisions and how the message is disseminated to the public. Mr. Plosser assured me that the federal reserve does have independent thinkers who are encouraged to voice their opinion both publically and privately. A quote that struck me was "federal reserve policy should not be set by the calendar." This is a reference to Dr. Bernanke's decision to publically disclose that the Federal Reserve will hold short term interest rates low until mid 2013. Mr. Plosser's contention and I wholly agree that " how does anyone know now what fed policy should be 12 months from now?" Mr. Plosser also contends that the more transparency there is with respect to how Fed policy is established and what the factors were that went into the policy decisions the better it is for our nations citizens. Once again, I agree.
Doug Hendee, CFP(R)
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