Sept. 27, 2011 -- SAN ANTONIO (Reuters) -- The U.S. economy is on a "knife edge" between growth and contraction and monetary policy tweaks do not seem to be helping, the Dallas Federal Reserve's top economist said Tuesday.
The U.S. jobs engine has lost momentum and could be set for further "backtracking," Dallas Fed chief economist Harvey Rosenblum told a forum sponsored by the greater San Antonio Chamber of Commerce. Meanwhile, he said, there is also a "credible" risk of rising inflation.
"We are in the midst of the Second Great Contraction," Rosenblum said, demonstrating the economy's predicament with a picture of a place on the Appalachian Trail known as "Knife's Edge."
"Economic growth has slowed; it may have stalled," he said. "The patient isn't responding well to the medicine."
The grim assessment of the economic outlook came a week after a majority of the Fed's policy-setting panel backed further monetary policy easing to help support a faltering U.S. recovery.