10 Charts That Show The Impossible Challenge Facing The Fed Right Now


The Federal Open Markets Committee is meeting today and will announce at 2:15 PM ET whether they will be adjusting interest rates.

There will be no interest rate adjustment, but it’s possible new action may be taken on the quantitative easing front. The most likely change, though, will be in the language.

Right now, the U.S. economy is experiencing a scenario of deleveraging, high unemployment, and high corporate profits.

The Fed is thus at an incredibly difficult juncture, due to a combination of macro headwinds, some signs of life, and a dwindling number of bullets.

Housing starts have slowed to a near halt, though picked up slightly recently.

Source: Calculated Risk

And delinquencies remain high on mortgages.

Source: New York Fed

Home prices are at risk of a double dip.

Source: Calculated Risk

Even though mortgage rates remain at lows.

Source: HSH.com

Consumers just don't seem that interested in spending.

Source: St. Louis Fed

And are, instead, deleveraging.

Source: Federal Reserve

Companies are making money by cutting costs.

Source: St. Louis Fed

And compensation is near pre-crisis levels.

Source: St. Louis Fed

But the unemployment rate is hardly moving.

Source: St. Louis Fed

Even though productivity is declining.

Source: Societe Generale

Worried about a double dip. Don't be...

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