Federal Reserve Sees Economy Slowing in 2008

The Federal Reserve seems behind the times. The economy has already slowed for most normal people.

The Federal Reserve said that the decision to cut a key interest rate last month was a "close call," according to minutes from that meeting released Tuesday.

But in a new economic outlook, the central bank also lowered its growth target for the economy in 2008, raising hopes that the Fed will cut rates again when it meets in December.

The Fed indicated in an addendum to its minutes that it now expects the economy to grow at about a 1.8 percent to 2.5 percent rate next year, down from a forecast in June of 2.5 percent to 2.75 percent growth.

"I am surprised that their forecast for next year is as low as it is," said David Resler, chief economist of Nomura Securities International Inc. "The forecast is considerably weaker than it had been and that is the most significant development in this report."

Why is anyone surprised at this forecast. I am surprised it calls for any growth at all. It means the White House has influenced this report and does not want to forecast a recession as that would torpedo the hopes of Republican candidates nationwide.

A recession is already in place in many areas of the country such as Ohio and Michigan. The subprime crisis is threatening the economy of Florida, California, Nevada and Arizona and oil is at an all time high. We are witnessing an economic perfect storm which will lead to a recession. The Federal Reserve can call it slow growth but the average American is worse off now than they were in 2000 and hopefully that fact will lead to the decimating of the Republican party in 2008 and a return to sane fiscal policy.