Federal Reserve Outlook

Federal Reserve officials said economic growth in 2008 will fall short of their own forecasts, reflecting weaker consumer spending and a deeper housing slump.
Policy makers ``agreed on the need to remain exceptionally alert to economic and financial developments and their effects on the outlook,'' the Federal Open Market Committee said in minutes of the Dec. 11 session, released today in Washington. ``Members would be prepared to adjust the stance of monetary policy if prospects for economic growth or inflation were to worsen.'' Policy makers at the meeting judged monetary policy to be ``somewhat restrictive,'' with growth risks increasing, the minutes said.

``Participants agreed that the housing correction was likely to be both deeper and more prolonged than they had anticipated in October,'' the minutes said.

Tracking the Dow on Wednesday,2.1.08.

At 10:00am(ET) ,the Fed's minutes on economic outlook triggered the sell-off.

Thereafter it slide further till the pivot-day session at around 1:00pm before a technical rebound which lasted for one-hour.There were substantial panic selling.The Bearish Harami pair at the close (a pregnant lady) might reverse to bullishness when the child is born tonight.

``The U.S. economy is in a fragile state and the signals coming out increase the chances of a recession.''

The largest decline in U.S. manufacturing in five years and record oil prices heightened concerns the world's biggest economy will enter a recession.

The manufacturing report ``lifts the probability of a global slowdown that will affect everything from European to Asian assets.''