Atlanta Fed

Just over two months ago, the Atlanta Fed "calculated" that Q1 GDP was going to be a pleasant 3.4%, confirming that the Fed had made the correct decision by hiking not only in December, but also last month. Since then, the Fed's own GDP estimate has crashed in almost linear fashion, and as of this morning - after the latest disappointing retail sales report - it had plunged to just 0.5%, which if accurate would make Q1 the weakest quarter going back three years to Q1 2014.

From the regional Fed:

Following today's disappointing consumer spending data, we forecast that a downward revision to the Atlanta Fed's most recent 1.0% Q1 GDP forecast was imminent...

Atlanta Fed to revise its Q1 GDP lower once more after Personal Consumption disappointment

— zerohedge (@zerohedge) March 31, 2017

Authored by Lance Roberts via RealInvestmentAdvice.com,

Future’s So Bright, We Gotta Hike Rates

“The simple message is the economy is doing well. We have confidence in the robustness of the economy and its resilience to shocks.” – Janet Yellen, March 15, 2017.

Really?

Before we start, we want to point out that if the Atlanta Fed GDPNOW forecast of 0.9% for Q1 is correct, this will be the weakest economic backdrop for the economy for a rate hike since 1980!! (according to Bloomberg data).

All we can say is...

While it may not be the very definition of irony, we do find the fact that the Atlanta Fed has just cut its Q1 GDP forecast from 1.2% to 0.9%, a number which if confirmed would be the lowest quarterly print in year, just two hours before the Fed's rate hike quite humorous. As a reminder, the number was as high as 3.4% one and a half months ago.

From the Atlanta Fed:

Latest forecast: 0.9 percent — March 15, 2017