This is getting, how shall we say it ... bizarre.
The Atlanta Fed just lowered it's fourth quarter GDP forecast. Again. Now, they predict that GDP will come in at 0.7%. For the record, in late November, the Atlanta Fed put that same forecast at 2.2%. In other words, they just supported the rate hike but have tacitly admitted that growth is slowing.
It gets worse. If our memory serves us right, just two weeks ago Atlanta Fed head Dennis Lockhart called U.S. growth "solid."
Question: What's so solid about cutting your GDP forecast four times in the past six weeks?
We've been chronicling this almost weekly occurrence for weeks now (here and here). To be clear, at 0.7%, their estimate is at the lower-end of our long-held and apparently justified gloomy GDP outlook.
Meanwhile, Wall Street is deluding itself with estimates that are nowhere near today's #GrowthSlowing reality. That, of course, is par for the course.
In other Fed "Fantasy Land" news, San Francisco Federal Reserve President John Williams said on CNBC today that he was unfazed by today's weak (recessionary) economic data out of China.
CNBC asked Williams what it means for the U.S. economy. Here's his response:
"In terms of those developments ricocheting into the U.S. economy, I think we have really really strong fundamentals, in terms of consumer spending, in terms of our economic trajectory, so right now at least this isn't a big concern for me... I think something in that three to five rate hike range makes sense at least at this time."
This is frightening.
Remember when the Fed was spooked into postponing its September rate hike because "many [officials] acknowledged that recent global economic and financial developments may have increased the downside risks to economic activity somewhat"?
Such concerns are apparently now a distant memory, the narrative of which has shifted to some rose-colored ideal of how strong the economy should be.