"The Shoals Of Depression Have Been Avoided, But The Economy Still Faces Strong Headwinds"


Northern Trust economist Paul Kasriel put together an excellent presentation on the state of the economy (embedded below).

Here’s the bottom line:

  • The recovery is off to a nice start
  • The odds of a double dip are low
  • The recovery will NOT be v-shaped, because consumer spending will not recover strongly (too much debt)
  • The financial system is still not lending aggressively and won’t until it repairs its own balance sheets
  • The unemployment rate will keep rising until the middle of next year, peaking at 10.5%
  • The Fed’s “money printing” is not CURRENTLY inflationary, but it has the potential to be if the Fed doesn’t handle the recovery right


Northern Trust On Economy September 2009

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