Fed Vice Chairman Paints Dour Picture

From the Wall Street Journel....

Federal Reserve Vice Chairman Donald Kohn said economic conditions remain "quite difficult" and cautioned that a likely return to stronger economic growth next year "could be relatively moderate."

The central bank's No. 2 official, who collaborates closely with Fed Chairman Ben Bernanke, also said monetary policy is "appropriately calibrated" to promote stronger employment and moderating inflation. His comments ratified market expectations that the Fed will hold its interest-rate target at 2% through much of this year. He added, however, that "a large measure of uncertainty surrounds that judgment" about the current stance, leaving the door open to further cuts if necessary.


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