Poole: Best bet is that we will not have a recession

Via Reuters:

ST. LOUIS (Reuters) - The U.S. appears likely to avoid an economic slowdown but the chances of a recession have risen, St. Louis Federal Reserve Bank President William Poole said on Monday.

"I think the best bet is that we will not have a recession," he said in response to questions after a speech to the St. Louis chapter of the National Association for Business Economics.

However, Poole later told reporters, "There is no question that the odds (of recession) are higher than they used to be."

...

"So far we're standing with very sticky shoes on that slippery slope," he said. "We do watch it very closely; there's no question that there's a risk."

Poole said the housing market continues to be a problem, but based on his readings of retail and auto sales data, consumer spending is flat but is not crashing.

One glimmer of hope is that while recessions are typically characterized by large business inventory overhangs, stocks are currently lean.

But Reuters may have buried the lede.

In his prepared speech, Poole said efforts to provide guidance on the likely direction of interest-rate policy often can sow more confusion than clarity.

"I have concluded that an ... attempt to provide forward guidance in the policy statement causes more communications difficulties than it solves," Poole said. "A key reason is that the economy is subject to more shocks and reversals than one might think."

Those shocks require the central bank to change interest rates more frequently that he would have thought likely before he arrived at the regional Fed bank 10 years ago, he said.

Here's a link to the speech.