WHAT SOME OF THE FED IS THINKING (AS OF YESTERDAY)

(Via Economist's View)

"On balance, then, I still expect consumer spending to be reasonably healthy, and for business investment to continue to expand. But I expect overall growth to come in somewhat below its long-term trend for the remainder of this year, based on my expectation that the drag from housing will continue for some time. The most plausible downside risk is that financial market developments will lead to higher mortgage rate spreads and will further depress housing activity. Other finance-related risks to economic growth appear to be relatively minor."

The Economic Outlook
Remarks by Jeffrey M. Lacker
President, Federal Reserve Bank of Richmond
Charlotte Risk Management Association
Charlotte, North CarolinaAugust 21, 2007