the NY Fed explained that “negative news since the report was last published two weeks ago pushed the Nowcast down 0.5 percentage point for both Q3 and Q4. The largest negative contributions over the last two weeks came from manufacturing, retail sales, and housing and construction data.” So, pretty much everything.
As usual, the forecast was overly optimistic, and as a result has been sharply dragged down for both Q3…
…. and Q4.
But what is most troubling is not that in the quarter in which the Fed is expected to hike rates for only the second time since the financial crisis, the US economy is now expected to grow only 1.2%, but that when taking into account the already abysmal Q1 and Q2 GDP prints of 0.8% and 1.1%,, US GDP – according to the NY Fed – is set to grow a paltry 1.4% for the entire year. This would be the lowest growth rate since the financial crisis.
So no, the Fed is most likely not going to hike rates in December, or likely ever again.
