In their last forecast, published in June, members within the open market committee expected growth in 2011 to range between 3.5% and 4.2%. As events unfolded since the summer, those expectations are to suffer a revision a be trimmed to 3 - 3.5 per cent.
In terms of unemployment, currently at 9.6%, the forecast of between 7.1% - 7.5% by the end of 2012 is likely to be left behind in favor of a bleak 8%, or even above that.
As for inflation, the Fed's target of 2% or a little below is to remain subdued, Chicago Fed Evans said that a 1% inflation in 2012 would not be out of the picture and that less than 1.5% in 2013 is also a possibility.
These reactions along with how much support QE2 has within the committee will give investors clues as to whether the plan will go on as planned or be cut short if risks pile and benefits fail to materialize. There is a third option, if at this juncture when the economy has no traction, the Fed's response was QE2, will they extend it if the forecasts become a reality?
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