How bad will the recession be in terms of its depth, breadth, and duration? Importantly, how does this downturn differ from those in the past, and how will those differences affect how this recession will play out?
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Capital spending has borne the brunt of this slowdown/recession. Can the economy mount any meaningful recovery without a significant pick up in capital spending? What are the influences underlying your outlook for business investment next year?
Yes. Consumer spending, federal government spending, and a stabel housing sector will lead the economic recovery starting in the second quarter of 2002 and building momentum through(Note: cut off)
The Fed has lopped off 450 basis points in 11 months. What are the signs that easier policy is working its way through to the real economy? Is there some structural blockage, or should we just be patient? What kind of headwinds are policymakers up against?
Signs monetary policy is working and reason to patient include: rapid money growth, surging refinancing, rising stock market, steep yield curve and near zero real short-term interest rates.
Headwinds (mostly dissipating) include: apprehension regarding future terrorist attacks, layoff announcements, weak corporate profits inhibiting capital spending, global economic conditions are weak (synchronized global recession /slowdown).
Copyright 2001, Bloomberg L.P.
