US NEEDS FISCAL PLAN SUSTAINABLE OVER LONGER RUN

MON POL EFFECT ON EMPLOYMENT LESS THAN WIDELY THOUGHT

EXPECT RISKS POSED BY EUROPE TO US TO DIMINISH NEXT YR

EXPECT MEANINGFUL PROGRESS ON US BUDGET W/ELECTION PAST

ECONOMIES TAKE TIME TO RECOVER FROM SEVERE SHOCKS

CONTINUALLY BUYING SECURITIES JEOPARDIZES INFL GOAL

BANK RESERVE SUPPLY AMPLE;LARGE ENOUGH TO SUPPORT RECOV

OUTLK PREDICATED ON CONT GRADUAL RISE IN HOUSEHLD CONF

CAUTIOUSLY OPTIMISTIC' ABOUT NEAR-TERM US OUTLOOK

MUCH OF RECENT SLUGGISHNESS IN US ECON 'UNDERSTANDABLE'

NOT CLEAR MPOL CAN CAUSE MATERIAL ECON IMPROVEMENT NOW

SEES FURTHER IMPROVEMENT IN GROWTH TOWARDS END 2013

EXPECTS 2013 GROWTH AT ANNUAL RATE OF 2% OR ABOVE

MORE RISKY,DIFFICULT TO EXIT LARGER FED BALANCE SHEET