The Atlanta Fed Q 1 GDP run rate fell to 2.1%. The Blue Chip Consensus forecast remains at 2%. The Merrill run rate is at 2.2% and the forecast is at 2.5% followed by 2% quarters for the rest of 2024.
The data last week took a turn for the better. This can be seen in the Bloomberg Economic Surprise Index.
The Merrill credit card spending went from negative readings for months to positive readings last week
The Financial Conditions have improved significantly since Powell's pivot. The Bloomberg Financial conditions formula actually shows conditions back to 2019 levels.
Importantly, the Fed raised its GDP forecast for 2024 to 2.1% from 1.4%. It also raised its PCE inflation forecast at year end to 2.6% from 2.4%.
The economic data certainly leaves room for a stronger economy. It was surprising how confident Powell was about cutting rates. On Friday after the close Fed Bostic said he expects one rate cut this year. He had been at two.
Europe very recently has had some improved economic reports, not a surge, but decent up ticks. It will take a while to see if this follows through. The ECB kept rates unchanged last.
The China saga continues. The stock markets have held up in the recent months with the government maneuvering. It got more buying of stocks by various funds, government pension funds. Last week one set of economic reports had better than expected results
While the stock market is stabilizing, it will not go up a lot until the economy is clearly stronger. Xi is working hard. He has a lot to repair. He has invited a group of top U S CEO's to Beijing to meet together. Companies are hesitant come to China these days. Foreign Fixed Asset Investment is as the lowest level in 30 years.
Blub
Jerry.