The Fed funds futures market was pricing in 58 bps in easing through year end.
Note the inflation numbers here but also note the January PCE report was released at the same time so we have more up-to-date inflation data.
Trump was out just before this release saying that the government shutdown cost ‘at least’ 2 points in GDP. That was a hint he’d seen the number beforehand and that it wasn’t what he wanted. Then again, he has a team of sycophants around him telling him they can get 5% GDP and so they need to give him something.
Yesterday, the Atlanta Fed GDPNow tracker fell to 3.0% after starting the week at 3.7%. The biggest part of the downgrade was yesterday’s trade balance number and I would suspect that most economists didn’t have that in their model. So in light of that and Trump’s comments, I see risks to the downside
