The Fed released it March 18 FOMC minutes, and it was revealed that many Fed officials were of the opinion that an economic contraction was “likely.” This is not earthshaking news especially in view of the fact that Fed Chairman Bernanke has since uttered the “R-Word.”
The Fed is usually behind the curve with its facts and announcements as Calculated Risk recently reported when reviewing historical statements:
For the recession that started in April 1960:
“By and large, however, the economy seems quite solid.”
Federal Open Market Committee, May 1960
“[Chairman Martin] was by no means convinced that the situation was serious.”
Federal Open Market Committee, July 1960
“The Chairman reiterated his views … There was a declining picture, … but the economy was not going over a precipice by any means.”
Federal Open Market Committee, October 1960
For the recession that began in July 1990:
“In the very near term there’s little evidence that I can see to suggest the economy is tilting over [into recession].”
Chairman Greenspan, July 1990
“…those who argue that we are already in a recession I think are reasonably certain to be wrong.”
Greenspan, August 1990
“… the economy has not yet slipped into recession.”
Greenspan, October 1990
There you have it. It pays to make up your own mind and not to listen to at times undecipherable Fed speak, which seems to be in no way related to reality.