Money in the Morning

FED LIKELY TO DOWNGRADE OUTLOOKFinancial Times on Tuesday's meeting: "Faced with weak economic data and rising fears of a double-dip recession, the Federal Open Market Committee is likely to ensure its policy is not constraining growth and to use its statement to signal greater concern about the economy. It is, however, unlikely to agree big new steps to boost growth." http://bit.ly/dgiU94

WSJ says the Fed meeting is "likely to feature further debate over whether the Fed should renew extraordinary measures to kick-start growth [...] may include resuming purchases of Treasury debt or mortgage-backed bonds, likely, at least to start with, by using money generated from existing holdings of such debt as they mature." http://bit.ly/9bfDRI

Also Tuesday, the House returns to vote on the $26.1 billion jobs bill with state aid.

Unions, who pushed hard for the bill, will "rev up campaign machinery" once President Obama signs it. The Hill's Kevin Bogardus: http://bit.ly/d3EWgY

THE NEW NORMAL: HIGH UNEMPLOYMENT, LOW RETURNS — ICYMI, the Sunday NYT's must-read on pessimism over the economy, a view shared by Clinton and Bush economists: "The 'new normal,' as it has come to be called on Wall Street, academia and CNBC, envisions an economy in which growth is too slow to bring down the unemployment rate, while the government is forced to intervene ever more forcefully in a struggling private sector. Stocks and bonds yield paltry returns, with better opportunities available for investors overseas."

Glenn Hubbard, former Bush adviser, calls for more federal investments in education: “If there is a new normal, it’s more about the labor market than GDP. ... We have to help people face a new world.”

Laura Tyson, former Clinton adviser: “I think we’re going to have slower growth, a higher household savings rate and an elevated unemployment rate for several years.” http://nyti.ms/blEaQp

(Tyson is being floated by the administration as possible successor to Christina Romer as chairwoman of the Council of Economic Advisers. Reuters: http://yhoo.it/cdMsHE)

AND/BUT... Monday's must-read — WSJ: "SOME FIRMS STRUGGLE TO FILL JOBS..."

"Employers and economists" blame it on: 1) extending jobless benefits to 99 weeks; 2) homeowners unable to move; and 3) the job market's shift away from middle-wage jobs that's created "a glut of people who can't qualify for highly skilled jobs but have a hard time adjusting to low-pay, unskilled work." http://bit.ly/aVY1yO

More people filing early for Social Security. WaPo: http://bit.ly/91dt3r

Gibbs tells The Hill the WH economics team is "exhausted," and that friction with Lawrence Summers wasn't the cause for Romer's departure. http://bit.ly/chhA0J

FINREGAnother financial crisis could hit before Wall Street reforms in place. Bloomberg: "Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world’s banks until 2018 to comply with limits on how much they can borrow. Parts of the Volcker rule, a provision of the new Dodd-Frank Act that would force firms to cut stakes in in-house hedge funds and private-equity units, may not go into effect for a dozen years." http://bit.ly/bY0b79 (h/t Silla)

How banks are trying to get around the Volcker Rule. WSJ: http://bit.ly/cEuEyn

DEFICIT V. STIMULUS  Bob Rubin opposes another stimulus, favors finding a plan to deal with deficits in about two years. HuffPo: http://huff.to/a8jHfh

Robert Samuelson warns that deficit reduction through higher taxes may mean less kids: http://bit.ly/d9w20y

Megan McArdle says Paul Krugman's wrong about the Ryan Roadmap. http://bit.ly/9k9laq