The Federal Reserve raised rates yesterday. "The simple message is -- the economy is doing well," Federal Reserve Chair Janet Yellen said following yesterday's Federal Open Market Committee meeting, which makes U.S. monetary policy decisions.
That was a smart decision considering, the U.S. economy is, in fact, accelerating. We have a GDP tracker that tells us just that.
But the Fed is clueless about what's next for the U.S. economy. Yes, clueless...
Following yesterday's rate hike decision, the Fed cut the top-end of its 2017 GDP forecast and now has a range of +1.7-2.3% year-over-year growth. Meanwhile, the Atlanta Fed's GDPNow forecasting algorithm suggests the U.S. economy will grow just 0.9% in the first quarter of 2017. "That's really funny," says Hedgeye CEO Keith McCullough in today's Early Look:
"I have no idea how the Atlanta Fed “tracker” is down at +0.9% GDP for Q1, but Darius and I quite like it when establishment economics departments have wildly varying forecasts vs. our own.
As you can see in today’s Chart of The Day, the Atlanta Fed’s GDP forecasts have 230 basis points of intra-quarter revisions (tracking error) since inception on a number that has a typical 0-300 basis point range. #lol"