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More see recession on the way

Jeremy Hobson Feb 25, 2008
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More see recession on the way

Jeremy Hobson Feb 25, 2008
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Lisa Napoli: The good news is that 55 percent of the economists surveyed in a new poll don’t believe the U.S. will fall into a full-blown recession. The bad news is that 45 percent of them do. The survey by the National Association for Business Economics is decidedly more of a downer than last quarter. From Washington, Jeremy Hobson reports.


Jeremy Hobson: The federal funds rate, which banks charge each other for overnight loans, has been nearly cut in half since September. The National Association for Business Economics predicts it will drop another half percent this year as the economy continues to slow.

Lynn Reaser: In the nearer term, it may be somewhat tough sledding.

That’s economist Lynn Reaser of Bank of America. She and her colleagues foresee the rate rebounding to 3.5 percent in 2009.

Stephen Cecchetti: I think it’s extremely optimistic and I hope that they’re right.

Professor Stephen Cecchetti of Brandeis’s International Business School says the forecast relies on the idea that the economy will rebound quickly, as it has in past recessions.

Cecchetti: Policymakers are not losing sleep over the rosy scenario. They’re losing sleep over the catastrophe that they see as being not a likely outcome, but a possible outcome.

Cecchetti says inflation worries may send interest rates up higher and faster than the association predicts.

In Washington, I’m Jeremy Hobson for Marketplace.

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