The Fed thinks the economy is worsening

Fed sees economy sliding further: FOMC minutes

"Credit conditions remained very tight, and financial markets remained fragile and unsettled, with pressures on financial institutions generally intensifying this year," the central bank said in the minutes. "Overall, participants expressed concern about downside risks to an outlook for activity that was already weak."

Pretty much speaks for itself.

Read the minutes.

Money line:

Overall, most participants viewed downside risks as predominating in the near term, mainly owing to potential adverse feedback effects as reduced employment and production weighed on consumer spending and investment, and as the weakening economy boosted the prospective losses of financial institutions, leading to a further tightening of credit conditions.

This understates things, but notice the concern about negative feedback loops. What's missing is a full appreciation of how truly and badly hurt the US consumer is, and how 'recovery' sans a healthy consumer is impossible....