Business

While investors pile into Tech Stocks based on endless promotion from the financial media, the US economy is rolling over.

Last week the NY Fed downgraded its economic forecast for 2Q17 to just 1.9%. Even worse, it is now forecasting 2017 total growth to be a measly 1.5%.

Yes, 1.5%.

There is a clear trend to this chart… and it’s NOT up.

Source: NY Fed

Wait, it gets worse.

The Citi Surprise Index has collapsed to levels not seen since 2011.

Source: Yardeni Research

Why does this level matter?

In an otherwise relatively quiet week in which the only upcoming US data is housing, current account and jobless claims, UK politics will again draw attention, one year (on Friday) after the Brexit referendum and as noted earlier, Brexit negotiations begin on Monday, despite lingering political uncertainty in the UK. Also no less than 9 FOMC members are scheduled to speak this week.

Democracy Is A Front For Central Bank Rule

Paul Craig Roberts

Several years ago when the Federal Reserve had its Fed funds rate at zero to 25 basis points (one-quarter of one percent—0.25%), there was a great deal of talk, somehow presented as urgent, whether the Federal Reserve would raise interest rates.

• UK PM May says attack on Muslims near mosque is 'sickening' (Reuters)
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• Market Volatility Has Vanished Around the World (WSJ)
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• Brexit Talks Kick Off in Brussels as May Urged to Soften Stance (BBG)
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• U.S., Japan Probe Deadly Ship Collision That Left Seven Dead (WSJ)

Over the weekend, One River's CIO Eric Peters said that last week's announcement by the Fed marked the "end of the QE era." At least one person, however, is not convinced: as the "increasingly grouchy" SocGen FX strategist Kit Juckes writes in his overnight note, slams calls that the Fed's announcement was a "hawkish hike", and says that "while we got more detail about the Fed's plans to run down its balance sheet, these amount to a pace so slow that they'll still have boatloads of bonds on board when the next recession strikes.