It appears, the worse the economy was doing, the higher the odds of a rate hike.
Putting the Federal Reserve’s third rate hike in 11 years into context, if the Atlanta Fed’s forecast is accurate, 0.9% GDP would mark the weakest quarter since 1980 in which rates were raised (according to Bloomberg data).
We look forward to Ms. Yellen explaining her reasoning – Inflation no longer “transitory”? Asset prices in a bubble? Because we want to crush Trump’s economic policies? Because the banks told us to?
For now it appears what matters to The Fed is not ‘hard’ real economic data but ‘soft’ survey and confidence data…