The Federal Reserve is “playing with fire,” according to a new report by the Congressional Budget Office, warning that it is likely to increase its monetary policy until the end of the year, potentially causing an economic depression and a “lost decade.”
The report from the nonpartisan CBO said the Fed has made some “oversights” in the past, such as reducing its balance sheet and expanding its balance of payments, which it said were important to its success.
It also noted that the Fed could choose to maintain its balance-sheet balance at current levels.
The agency said the current balance-sheets may be too tight to support the Fed’s $4.5 trillion in assets and liabilities.
It said the central bank has made significant progress in reducing its portfolio holdings, but it “is likely to continue to face significant challenges” in addressing the economic challenges facing the country.
The Fed’s new report says it will increase the size of its balance sheets and increase its reserves to $2.2 trillion by the end, which would make it the third-largest central bank in the world.
But it said the economy is unlikely to recover until after the Fed raises rates again.
The report warned that, with inflation still low and wage growth slow, the Fed may not be able to avoid an economic crisis.
The report also said the unemployment rate is likely in the high single digits.
It also said that it will not raise interest rates until the economy has recovered from the global financial crisis.
The CBO also said it would be “extremely difficult” for the economy to recover after the central banks actions and that it was likely to see “tremendous” economic damage and “devastating” consequences.
The agency said its latest forecasts “would indicate the Fed will keep the federal funds rate near zero for the foreseeable future.”
The Federal Reserve’s latest policy statement comes after a report last week by the nonpartisan Congressional Budget office found that the central bankers policy of buying bonds at a discount has caused the economy “a sustained and substantial increase in inflation.”
In the CBO report, it said that “the Fed’s bond buying has been effective at stimulating economic activity” and that the economy was “now in the midst of a prolonged period of moderate growth.”
The central bank’s $3.9 trillion balance sheet is “a significant portion of the $20 trillion that the U.S. government has provided over the past 40 years,” the CBO said.
It warned that the “preliminary results of the economic recovery” may not last.
“While the unemployment is low, the economy continues to lag behind many other advanced economies.”
The CBO said that the recession that began in the late 1990s is likely over.
“The U.A.E. and the rest of Europe are recovering strongly, the United States is in a stronger position than many people thought it would have been, and the economy seems to be on a recovery trajectory.
But the longer this trend continues, the more likely it is that we will see recessions, especially in the coming years.”
Read moreThe report came as the U!
Senate Committee on Banking, Housing, and Urban Affairs held a hearing on the potential impact of the Federal Reserve.
The committee’s chairman, Sen. Sherrod Brown, D-Ohio, said the Senate Banking Committee would hold hearings on the issue and hold hearings as needed.
In an earlier report, the CBO also warned that “a combination of policy risks, including the lack of consensus on the impact of interest rate hikes and monetary policy tightening on the economy, may be holding back the recovery and the recovery’s prospects.”
The budget office added that the fiscal impact of a rate hike on the nation’s economy would be greater than the $8 billion in the deficit reduction the Fed would get.