Further, the Fed expects that businesses will now feel more comfortable about going out and start hiring employees.
Well, expect a marginal improvement, more in the nature of strengthening the floor than in the nature of adding a new storey. But the Fed anticipates that the unemployment rate will move down, by the end of 2014 (!), to somewhere between 6.7 and 7.3 percent (versus their earlier forecast of somewhere between 7.0 and 7.7 percent, which was the forecast in June). My view is that 6.7% may be hit sooner than anyone expects at present, but it won’t be for reasons to do with the Fed’s actions, it will depend rather on clarity about the wider rules of the game such as Frank-Dodd and the Romney versus Obama approach to economic growth versus economic inclusion.