Prospects for high productivity growth should, with time, bolster both consumption and investment demand. Before long in this scenario, excess inventories would be run off to desired levels. Still, as the FOMC noted in its last announcement, for the period ahead, downside risks predominate.
The economic outlook Although the recovery continues to be uneven across sectors, recent economic and financial developments are broadly consistent with my forecast that the economic recovery will gain even more momentum and that the expansion will become sufficiently strong to gradually bring down the unemployment rate.