by Calculated Risk on 3/03/2010 01:02:00 PM

From Altanta Fed President Dennis Lockhart: Recovery and Reform Excerpts:

My current forecast—and that of my staff at the Federal Reserve Bank of Atlanta—lines up with ... the modest recovery scenario.

The incoming data through last week have not made me alter my basic forecast, but I consider it still too early to make a definitive call on which scenario will play out. The January numbers, as you may know, have been mixed. Consumer spending was strong for the month, while business spending on capital goods was weak, and job growth was flat. Upside surprises in inventories, capital spending, and consumption could tip the scales in favor of a stronger growth forecast. I will be particularly attentive, watching for evidence of these developments as the recovery proceeds.

Because I hold to this forecast of modest recovery and believe inflation is likely to remain subdued, I fully support the message of the most recent FOMC statement to the effect that the fed funds target rate will remain exceptionally low for an extended period.

This is a follow-up to Lockhart's The Economic Outlook: A Tale of Two Narratives.

I still expect the recovery to be sluggish and choppy in 2010, but for the economy to avoid a "double dip" recession.