Unemployment will continue to rise into 2010, says Chicago Fed president Evans. Real GDP will likely fall sharply in the first half of the year though he does not see much risk of outright deflation. If things don’t improve large purchases of long-term securities may be useful, he says.
Stocks are extending their rebound this afternoon, lessening risk aversion. Shares are down about 0.75% on the day. EUR/JPY is therefore firmer, at 117.90 while EUR/USD is a cent off its lows at 1.3125.
