Fed Throws in Towel on U.S. Economy

Well, The Federal Reserve Board (Fed) is throwing in the towel on the U.S. economy for at least the next five or six years. That is how long the Fed now believes it will be before the economy returns to it's "longer-run path."

The Telegraph reported:

"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016.

"The Fed is throwing in the towel," said Gabriel Stein, of Lombard Street Research. "They are preparing to start QE again. This was predictable because the M3 broad money supply has been contracting for months."

The Fed minutes amount to a policy thunderbolt, evidence of how quickly the recovery has lost steam. Just weeks ago the Fed was mapping out withdrawal of stimulus.