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ICNNI ITheStreet.comI IMarketWatchI feature Hampel on economy
NEW YORK and WASHINGTON (9/4/09)--Bill Hampel, chief economist for the Credit Union National Association, was quoted in three national publications regarding his perspectives on the economic recovery, the Federal Reserve’s actions and the Federal Open Market Committee’s (FOMC) August deliberations on the economy. Several economists concur that the Fed, Congress and the Bush and Obama administrations should share the credit for steps taken to help end the recession, said CNN.com Thursday. “The actions of the Fed and Treasury starting last October actually worked, regardless of how unpopular they were,” Hampel told CNN.com. “It was messy. It was dirty. It required a lot of money. But they were successful in preventing the implosion of a lot of institutions.” The FOMC noted in its minutes and statement regarding its August meeting that it will keep its key interest rate at zero for “an extended period,” said The Street.com Wednesday. If other factors remain relatively the same, that decision likely will result in an interest rate hike in the middle of 2010, Hampel told the publication. “The Fed does a good job of being apolitical, but they're still in Washington, so I find it unlikely that they'll raise the fed funds rate until employment improves,” Hampel said. “Don't expect the fed funds rate to increase till next summer.” And Hampel told MarketWatch Wednesday, “The bottom line is that until we see a demonstrable improvement in the labor market, they [the Fed] are not going to raise the fed funds rate.” He also told the publication that Fed officials were “less worried that they were too optimistic about a second-half recovery.” Considering the high debt burden consumers are carrying, the recovery “will not be too much to write home about,” he added. On a related topic, Hampel told MarketWatch that deflation is unlikely to occur. However, the fact that federal officials are discussing it should indicate how remote the possibility is of inflation going up.
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