The U.S. economy contracted at a surprisingly sharp 6.1 percent rate in the first quarter reflecting continuing economic woes. In the meantime, President Obama marks his 100th day in office while analysts anxiously awaited the latest from the FOMC's interest rate decision due this afternoon. (UPDATED with the Fed decision, below). Read and listen to what experts had to say...
Recovery, Yes! Now the Bad News...
Patricia Chadwick, president of Ravengate Partners, said although there will be a market recovery, the rebound will be “unbelievably puny.” She also said it will not be a “V-shape” recovery that so many people are anticipating after a sharp downturn. There are still many economic problems that need to be fixed before we see any positive upturn, she said.
GDP Rosier than We Think?
“I don’t think it’s as bad as it looks,” said Mark Zandi, chief economist at Moody’s Economy.com on this morning’s latest GDP numbers. He said the fact that consumer spending was positive is “a very significant plus.” He expects more consumer spending growth in the second and third quarters.
No Fed Fireworks This Time
Lawrence Meyer, vice chair of Macroeconomic Advisers, anticipated no major policy innovations from the FOMC meeting, set to end Wednesday afternoon. He said the Fed's focus would most likely be on a continuation of its current programs. He added that there’s still a “long way to go” for the duration of the Fed holding its near-zero funds rate.
UPDATE: The Fed Funds rate was left unchanged at zero to one-quarter (0.25) percent. The Fed Discount rate was also left unchanged, at 0.50 percent. The FOMC said financial markets show gradual improvement and economic outlook has strengthened "modestly" since March. It expects subdued inflation.
Obama Gets Thumbs-Up
Today marks Pres. Barack Obama's 100th day in office. Don Peebles, CEO and chairman of The Peebles Corporation, said Obama’s leadership is helping Americans become more optimisticdespite going through an unprecedented economic turmoil. “[Americans] believe that the end is near and better times are ahead,” he said.
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