Spot traders could care less if the Fed targets inflation or not but economists are all abuzz about the Fed taking steps to set an inflation target. Part of that process consists of the Fed now forecasting the economy five years out. Good luck with that.
Most significantly in the FOMC minutes, the Fed lowered growth forecasts and raised its unemployment view, Marketwatch reports:
According to the minutes, the FOMC’s updated forecasts predict that the economy would likely shrink between 1.3% and 0.5% this year, then grow about 2.5% to 3.3% in 2010. The unemployment rate would likely rise to 8.5% to 8.8% this year before gradually declining over the next two years. The group said consumer prices would likely rise 0.3% to 1% this year.
