The one clear message from the Fed meeting this week, was that any economic indicators that did not fit their narrative were just “Transitory”. Having been consistently wrong in their forecasts for 6 years or more, this lack of humility and degree of denial is becoming increasingly remarkable.
The divergence between the Fed’s view and the economic data is now reaching levels not seen since early 2008.
Thad Beversdorf explains:
Just in case this is not persuasive enough there is so much more. Here are 16 more data points worth considering.
The most disturbing point in Wednesday’s weak Q1 GDP report, was not just that it was so weak but that it suggests further weakness ahead. High inventory growth and weak fixed investment suggest that the current weakness is at an early stage.
The data keeps rolling in on the weak side, so it is quite likely that the final Q1 GDP data will be negative.
Today the data remained troubling:
Already the Atlanta Federal Reserve model which nailed Q1 GDP is downgrading its Q2 GDP forecast, which stands far below the blue chip consensus.
Jim Rickards nailed the situation so well in a recent tweet: