Email-- The functioning of financial markets and the banking system in the United States has improved significantly. Manufacturing production in the United States has risen nearly 15 percent since its trough, driven substantially by growth in exports.
-- overall, the recovery from the crisis has been much less robust than we
had hoped. Recent revisions of government economic data show the recession as
having been even deeper, and the recovery weaker, than previously estimated.
-- With commodity prices having come off their highs and manufacturers' problems
with supply chains well along toward resolution, growth in the second half of
the year seems likely to be more rapid than in the first half. However, the
incoming data suggest that other, more persistent factors also continue to
restrain the pace of recovery. Consequently, the Federal Open Market Committee
(FOMC) now expects a somewhat slower pace of economic growth over coming
quarters than it did at the time of the June meeting. Consumer behavior has both
reflected and contributed to the slow pace of recovery.
-- European Risk: It is difficult to judge how much these financial strains have
affected U.S. economic activity thus far, but there seems little doubt that they
have hurt household and business confidence, and that they pose ongoing risks to
growth.
-- important objective is to avoid fiscal actions that could impede the ongoing
economic recovery.
-- As the FOMC anticipated, however, inflation has begun to moderate as these
transitory influences wane; In addition to the stability of longer-term
inflation expectations, the substantial amount of resource slack in U.S. labor
and product markets should continue to restrain inflationary pressures.
-- The Committee will continue to closely monitor economic developments and is prepared to take further action as appropriate to promote a stronger economic recovery in a context of price stability.
