Today"s Topic: Fed Minutes
The Fed (Federal Reserve System) released the minutes of its last meeting in March , on Wednesday. The (Federal Open Market Committee) is the policy setting arm of the Fed. They announced, to most economists' surprise, a plan to purchase over $1 trillion in Treasury securities and mortgage related securities. This was a surprise because, once again, maintenance employees will have to add some lubricants to the money presses. This creates an additional inflationary threat somewhere down the road, but in the short run, the Fed believes this action is required to stabilize the economy.

The minutes show that the Fed's outlook is deteriorating and they emphasized the frailness of the financial system and a sharp decline in net exports. They now expect real GDP to be flat in this year's second half before a slow recovery resumes in 2010.

It is interesting to note that the Fed is more pessimistic, just as many economists are more optimistic. This is unusual, but if the Fed is closer to being correct, it will delay inflation from taking off.