Fed Officials Pretend to Reassess U.S. Outlook Amid Global Weakness

By Craig Torres Jan 21, 2015 10:53 AM ET

Photographer: David Paul Morris/Bloomberg

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Federal Reserve officials are starting to PRETEND TO reassess their outlook for the economy as global weakness and disappointing data on American consumer spending test their "resolve" (ABSURD PRETENSE THAT THEY MIGHT) raise interest rates this year.

San Francisco Fed President John Williams last week said he will trim his U.S. estimate because of slower growth abroad. Atlanta’s Dennis Lockhart said Jan. 12 that he advocates a “cautious” (NON EXISTENT) approach to rate increases and inflation readings “may be pivotal.” (GIVE US PLENTY OF COVER) Both are voters on the Federal Open Market Committee in 2015 and repeated that rates could (IN THE LAND OF MAKE BELIEVE) be raised in the middle of the year.

Weakness in Europe, Japan and China has dimmed the outlook for the world economy, with the International Monetary Fund and World Bank reducing their estimates for global growth. Last month’s decline in U.S. retail sales, the biggest in almost a year, suggests that Americans may be cautious about spending a windfall from cheaper gasoline even as the job market improves.

“You have some cracks appearing in the official line that lower oil prices are good for the U.S. economy and that the U.S. can grow even if the global economy is weakening,” said Thomas Costerg, an economist at Standard Chartered Bank in New York. “There are headwinds.”'

The Bank of Canada today unexpectedly cut its target rate by a quarter-point to 0.75 percent in response to the drop in oil prices, which it said will be “negative for growth and underlying inflation in Canada.”

FOMC Meeting

Fed officials will "discuss the outlook" (PRETEND TO MULL THINGS OVER) when they meet next week, though they aren’t scheduled to release their next set of economic projections until March.

Even small cuts to their forecasts are likely to reinforce the message that the FOMC can be “patient” (WILLING TO WAIT FOREVER) as it plans to PRETEND TO raise interest rates for the first time since 2006. Chair Janet Yellen indicated in her December press conference that rates are unlikely to be raised “for at least the next couple of "meetings,” (CENTURIES) or not before late April.  (OF 3015)