Federal Reserve officials must choose this week between theirbest estimates and their worst fears of what will happen to theU.S. economy.

Policy makers will bring new forecasts to their June 19-20meeting and probably will mark down their April central-tendencyestimate for growth of 2.4 percent to 2.9 percent this year.Lurking in the background is the risk of increasing financialstress in Europe and stubbornly high U.S. unemployment that hasremained above 8 percent for 40 consecutive months.

All this could prompt them to move away from their outlook formoderate growth and tilt toward a “risk-management” strategypioneered by former Fed Chairman Alan Greenspan, which puts moreemphasis on tracking and containing high-cost threats. Both JanetYellen, the Fed's vice chairman, and William C. Dudley, head of theFederal Reserve Bank of New York, used the phrase in the pastmonth.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.