Well, the Federal Reserve would never say anything so blunt as that, but that’s the unmistakable message coming from our central bankers. The nub of the Fed’s report is this:

Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up.

The report adds: “The Committee now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting and anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.”

Therefore, the Fed will keep interest rates at or near zero.

Fed watchers note that the language in this report is worse than the verbiage in the June report. “The Fed downgraded its economic assessment, saying growth has been ‘considerably slower’ instead of 'somewhat slower’ [reported in June] than anticipated. It also now points to ‘deterioration’ in the labor market, compared to just ‘weaker than anticipated.’ ” CNBC observed that although the borrowing rate would remain exceptionally low, there would be “no quantitative easing, no yield curve flattening, no Troubled Asset Relief Program or any facsimile thereof.”

The news had the effect of confusing investors, as stocks wildly swung down and then up after the Fed report. Thankfully, the Dow finished up more than 400 points.

As an economic matter it was “unprecedented,”some observers said, to have the Fed pronounce that interest rates would remain steady for two years. But mostly this was a statement of continued gloom and doom. One business adviser with whom I spoke said, “Politically, the Fed is basically saying that they don’t expect a recovery until mid-2013. It doesn’t take a political genius to figure out that’s after the election.”

Somehow I imagine that Fed report (or parts of it) are going to find their way into the 2012 campaign. And, unless the Fed is very wrong, this is a very ominous forecast for President Obama’s reelection prospects.