Editor's Note: Below is a brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough. In it, McCullough discusses how the Fed's forecasts are slowly migrating to our Macro team's economic outlook... but on a (significant) lag. Click here to learn more about the Early Look.
First, let’s review the “incoming-data” that changed Janet Yellen’s Fed forecasts, on delay:
- GROWTH – the Fed revised its 2017 US GDP forecast UP by 20 basis points from 2.2% to 2.4%
- INFLATION – the Fed revised its 2017 core PCE forecast DOWN by 20 basis points from 1.7% to 1.5%
Yep, nice and linear and tidy – 20 basis points up here, 20 basis points down there – and, voila, you generate a REAL growth surprise to the Fed’s prior REAL growth forecast.
