In the wake of the crisis, the Fed’s balance sheet increased from the historical 6 percent of GDP to more than 20 percent. As plans are made to return to normal monetary policy, it’s important to be aware of the challenges and potential pitfalls of this transition.

Despite pockets of strength, the U.S. economy continues to struggle to build consistent momentum. Real GDP growth rebounded in the first quarter of 2013 after ending 2012 on a relatively weak note.

Initial claims may now be useful for forecasting employment growth during periods of increasing economic activity.>

Although some think it's too soon to worry about high inflation, there are risks for that to happen in the medium term. Besides the obvious risks, a new bubble might be brewing in asset prices as investors search for higher returns, and the gap between actual output and potential output might be...