KC Fed president Hoenig sees a grim economic outlook through the middle of 2009 and says the recession is likely to be deeper than those in 2001 and 1990. Most would agree.
Looking ahead, Hoenig says the Fed must act quickly to deleverage its balance sheet once a recovery begins so that future stability and growth are not put at risk. The crisis will ease when deleveraging bottoms and banks become financial intermediaries again.
Also crossing the wires is news of a G7 confab in Rome in mid February. Finance Minsiters and Central bankers will attend.