The information reviewed at the July 31–August 1 meeting indicated that economic activity increased at a slower pace in the second quarter than earlier in the year and that labor market conditions had improved little in recent months.
Manufacturing production decelerated significantly in the second quarter following a large gain in the first quarter, while the rate of manufacturing capacity utilization was unchanged on balance.
Real personal consumption expenditures increased at a slower rate in the second quarter than in the first quar-ter, primarily reflecting a decrease in spending for mo-tor vehicles. Meanwhile, real disposable personal in-come rose at a faster pace than consumer spending in both the first and second quarters, boosted in part in recent months by lower energy prices. Consumer sen-timent as measured by the Thomson Reu-ters/University of Michigan Surveys of Consumers (Michigan Survey) was more downbeat in June and July than earlier in the year.
Despite new historical lows for residential mortgage rates over the intermeeting period, refinancing activity remained relatively muted.
Consumer credit expanded further in May as a result of rapid increases in student loans and, to a lesser extent, auto loans.
The Committee had provided additional accommoda-tion at its previous meeting by announcing the continu-ation of the maturity extension program through the end of the year, and more time was seen as necessary to evaluate the effects of that decision. Nonetheless, many members expected that at the end of 2014, the unemployment rate would still be well above their es-timates of its longer-term normal rate and that inflation would be at or below the Committee’s longer-run ob-jective of 2 percent. A number of them indicated that additional accommodation could help foster a more rapid improvement in labor market conditions in an environment in which price pressures were likely to be subdued. Many members judged that additional mone-tary accommodation would likely be warranted fairly soon unless incoming information pointed to a sub-stantial and sustainable strengthening in the pace of the economic recovery.
Here’s the problem with all of this.
Unless growth in the economy exceeds credit expansion plus population expansion (since GDP is reported gross and not “per-capita”) such credit expansionary policies in fact move the common man’s standard of living backward, and the more “accomodation” you provide the more backward movement takes place!
This is a function of basic arithmetic, and yet there is no evidence — anywhere — that The Fed’s policies up to this point have done anything except replace private unbacked credit emission (that is, mathematically counterfeiting) with government credit emission.
That’s it. It has done nothing else. It has only protected the banksters from having to pay the ultimate price for their hubris during the 2000s — bankruptcy. And more QE will do nothing more than that; there is, again, zero evidence that it is capable of doing anything else!
Will the market figure this out? Eventually.
One way or another.