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Expectations for 2010

The latest Wall Street Journal survey of economists presents some pretty interesting conclusions. It is predicted that unemployment will stay in the 9.5% to 10.3% range for the next year although on average it is expected that the economy will add about 50,000 jobs a month in 2010 (100,000 a month is what is required to keep pace with the growth of the working population). It is also assumed that the GDP growth will be around 3% for the year, a bit slower than what was registered in the third quarter of this year. The most interesting conclusion is that interest rates will likely increase in the latter part of 2010 – right about the time of the elections. This will end up being a factor in some races. The Fed is not all that concerned with the reaction of politicians and will likely act in whatever way they deem appropriate. The sense is that inflation will have started to become an issue by that point and the Fed will have little choice but to act. 11/13 http://www.strategic-briefs.com