The Atlanta Fed Q 1 GDP run rate is at 2.5%. The Blue Chip Consensus forecast is at 2.1%. The Merrill run rate slipped to 1.9%. Its forecast is at 2.5%. There was little change in forecasts last last week.
March was a stronger month, aided by Easter falling in March instead of April. You can see this in the April credit card volume. It has been negative in early April.
This week we get the March Sales. The consensus is for for a 0.5% increase from 0.3% in February. Merrill expects a stronger 0.7%.
We basically have had a better than expected start to the year. Everyone has raised forecasts including the Fed. We are now playing out the rate of growth and the ramifications for Fed policy. This possibilities include higher inflation, higher interest rates and stagflation. Blub
Europe has been showing up ticks from a period of a basically a flat economy for Europe as a whole. The expectations have led to the possibility of an ECB rate cut in June. There is some hesitancy to cut before the Fed does.!!!
China continues to have bumps in the road. The data has been up ticking recently. The government is trying hard. Friday the normally robust Trade Surplus came in at a $58.5 billion from $125.2 billion, well below a consensus $71 billion.
It will take a while to see if the Middle East turns into an economic problem.The most obvious risk is a disruption to oil with higher energy prices getting into the inflation numbers. This would complicate the Fed's job significantly as it impacts inflationary expectations.
Blub
Jerry