Wednesday, October 6, 2010

Goldman Sachs: U.S. Economy is Either 'Fairly Bad' or 'Very Bad'

Remember the Goldman Sachs of the 96 out of 96 successful trading days? They just said the U.S. economy is likely to be fairly bad or very bad over the next six to nine months.

Bloomberg reports that Jan Hatzius, the New York-based chief U.S. economist at the company, wrote: “We see two main scenarios [...] a fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.”

The Federal Reserve will probably move to spur growth as soon as its next meeting on Nov. 2-3, Hatzius said. Their oikley outcome is the  “fairly bad” outlook.

"Another $1 trillion of asset purchases by the Fed would probably lower long-term interest rates by about 0.25 percentage point, adding a 'few tenths of additional GDP growth,'.

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