The NY Fed Just Cut Its First Half GDP Forecast To 1.0%

Tyler Durden's picture

The New York Fed's 'decidedly-more-optimistic-than-Atlanta-Fed's-GDPNow-model' NowCast model for GDP growth just tumbled back to reality after a week of dismal data finally forced its hand. Treasury bond yields are extending their tumble as NYFed slashes Q1 growth to just 0.8% (from 1.5% in Feb) and collapsed Q2 growth to 1.2% from 1.9% last week. This cuts the entire H1 estimate from 1.5% to 1.0%... shamed down to GDPNow's reality.

Q1 cut...


And Q2 slashed...


And what drove the drastic cut...

Source: NYFed

This means the US has to grow 3.4% in the second half to hit the Fed's target!

It appears the shaming of their 'optimism' has worked. And the reaction in bonds is clear...

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brada1013567's picture

Now they finally get it, the Atlanta Fed was smarter, if things look too good the might be forced to raise rates.



Glad they found the goal seak function.

Cognitive Dissonance's picture

The illusion of freedom is promoted by allowing a very narrow subject of discussion, but then allowing a great deal of discussion on the narrow subject.

For example, let's keep the discussion to how much inflation or growth we have and never about who or what inflation helps or if constant growth is even sustainable.

MillionDollarBonus_'s picture

We are running a serious risk of deflation because of indecisive and anaemic fiscal and monetary policy! What is it going to take for our economic officials to get the magnitude of the deflationary threat? Our economy is starved of demand! Are we really going to have to wait for a recession before our officials wake up and do what it takes to stimulate the economy? Why can't we learn from history and avert this disaster!?

Cognitive Dissonance's picture


Let's start by drafting MillionDollarBonus into the Army, then sending him out as cannon fodder.

skinwalker's picture

That's such an absurd argument. Demand is infinite. People will always want more than they have. Purchasing power is the limiting factor. 

Quebecguy's picture

Deflation over. Hyperinflation is in progress (smaller sizes in packages, i.e. candy bar). All part of The Plan. Learn from History. 

Raging Debate's picture

Quebec - Don't agree, many political heads wold roll literally. Politicians are sociopaths but they are not stupid. See Europe and bond haircuts already occuring for more of what is to come.

YOU learn from history dumb fuck and it isnt 1800 anymore.

See US, Ike and 1956. Start there before insulting others as the topic is US economy. Cultures also have flavors this matters despite all the 'new empire world order' crock of shit. Central banking is the weakest empire in history and the last, thank god for both.

It is fight club but my fag 85 year uncle punches harder then you. You must be french. 

Hohum's picture


Not one of your best efforts.

Bill of Rights's picture

Good go short then mouth full of Diarrhea...Ill gladly take your money.

oncemore's picture

You with your family members have to go to the front line as the first persons.

Where do you come from?

My guess is Ukraine.

bobsmith5's picture

But MDB, that's what the central banks are for.  That is the very reason for their existence, to prevent deflation. When you start printing warehouse receipts to substitute the gold and silver that should be in circulation, this is the risk you run.  But now that you have replaced both gold and silver with a currency which is nothing more than a debt instrument you create an even greater problem and run monstrous risk to the economy. 

When you can print unlimited currency money debt substitutes for the real thing, you have the power to prevent deflation.  If you have central banking all over the world, which we have, then you can very slowing inflate the entire world and make the system appear to last forever. 

The question is, are we at the end of that cycle?  Nobody knows because there is no precedent for what we have now and where we are now.  What we do know for sure, is that this system is going to fail, at it's very inception it was designed to fail, so get ready for it.  It cannot be stopped.

KnuckleDragger-X's picture

This is what happens when you feed the magic fairies crack. You can avoid reality all you want, but that doesn't mean reality will avoid you......

onewayticket2's picture

it is an ELECTION YEAR.....


the first half is throw away.....all to make 3Q look ROBUST!  



KnuckleDragger-X's picture

"Ive got a bad feeling about this" There's going to be an awful lot of defaults they'll have to paper over to make that work.......

DogeCoin's picture

Real negative GDP is the new positive. What about real positive GDP? LOL we're already in the Greatest Depression!

Quebecguy's picture

Yawn, that's a wrap, someone please wake us up when the GSR is a little better.


GSR 76.017 (Closing)

venturen's picture

Dow 18000! If it had gone negative....we could have had Dow 20000 today! The Alice in Wonderland economy! 

Quebecguy's picture

Thanks again, Zh, and Zerohedgers, it's been a lot of laughs. Hope that all is well with you and yours.

buzzsaw99's picture

MOARward comrades!

Bill of Rights's picture

Key word here



Cautiously Pessimistic's picture

The formula they are using:



Theonewhoknows's picture
Theonewhoknows (not verified) Apr 15, 2016 10:16 AM

ZGP - Zero growth policy - existing in Europe now will be introduced in the US. Not like it is not already here - government is just using different methodology to present data rather than one from '80s when they still haven't been lying at leasta bout inflation. (check Shadowstats). So now it is important to ask yourself what you can do about it HERE AND NOW. We all know that the ship is going down but the music keeps playing but what we should be thinking about is how not to be swept by the wave of bad consequences developed world indebtedness, bubbles in many corners of market and war on cash. Playing a bear against central banks may be very hard on the other hand, prolonging this binge QE-driven bubbles equals meeting a wall sooner or later.

Ajax_USB_Port_Repair_Service_'s picture

Falling treasury bond yields are a sure sign of a solid economy. Right.

agstacks's picture

There are clear issues with how we calculate GDP. It should be obvious to everyone at this point. We need to take a good hard look at how we arrive at this number to ensure we are not leaving economic activity uncounted. We all know the growth must be higher than what has been stated. I believe this read on GDP is peddling fiction.

agstacks's picture

There are clear issues with how we calculate GDP. It should be obvious to everyone at this point. We need to take a good hard look at how we arrive at this number to ensure we are not leaving economic activity uncounted. We all know the growth must be higher than what has been stated. I believe this read on GDP is peddling fiction.

Calculus99's picture

The sad reality is they're probably cooking the 1% figure.


Hapte's picture

That depends on how you define "probably" and "cooking"...

Or "reality"...



Infield_Fly's picture
Infield_Fly (not verified) Calculus99 Apr 15, 2016 10:50 AM

yes, stated 1% and you can bet it's much worse

Secret Weapon's picture

They are using Enron styule accounting and all they can come up with is 0.8%.  Damn - the real number must be -4.6%

Quebecguy's picture

Yes, this mess is the BEST picture they can present. 

Climb's picture

Things seems to getting pretty bad - continuously!

Serious Question:  I'm in my mid-30's and have 50k in debt (student loans, credit, auto) and about the same in my 401k rolled into an IRA with no current investment strategy.  Should I pull my IRA savings and get taxed on it to pay off my debt and start saving for retirement all over again.  50k seems like very little to me to even have saved so why not pull it out to be debt free and start saving from scratch?

This would only seem foolish if the stock market was going to be rapidly increasing this year, right?

Thank to anyone who has serious advise!

Stormtrooper's picture

Just hang on until Obama forgives your debt. It is an election year you know.

Climb's picture

I hear if I stare at the sun long enough I can go leagally blind and then apply for 100% disability.  Does Obama's pardon work for me if I became disabled in a couple months or just people previously disabled?




skinwalker's picture

Here are your options. 


1. The economy grows, maybe not at what you'd like, but enough. Maybe it contracts, but not too badly. Under this scenario you're better off continuing as you are, as you can presumably service your debt with your current income and you wish to avoid the penalty. 


2. The economy takes a nosedive, great depression style. In this case, you'd probably lose your job, be unable to service your debts and be at the mercy of your creditors. 


You need to determine which scenario is more likely. 


Personally, and this is solely my unprofessional opinion, you are better off taking the penalty and getting out of debt. I sold one of my companies for the sole purpose of paying off my mortgage and becoming debt free. That way, in a nosedive I only have to come up with the cash for the property tax each year. And I have several years worth of that sitting in my safe. 


It's a great feeling, knowing you're not beholden to anyone. However, this lifestyle is definately not for everyone. 

Climb's picture

I have no crystal ball and if you would have asked me this question 2 years ago when I first started following this site I would have said we were all doomed in a matter of months.... 

Since the doom and gloom hasn't yet happened I'm really not sure.  I believe it's a matter of time but when.... you got me!

Debt free would add so much to monthly cash flow I would think I could save like never before... thanks for your unprofessional input!

jldpc's picture

Compare the rate of out of pocket expense on the debt to a realistic rate of return on your IRA. Now take your age and add 10 years, and calculate your out of pocket staying as you are versus your out of pocket (including the tax for redemption) if you pay off your debt. Surprise your problem/solution will be clear. Remember you only have so many years to work and save. That is key to your question. As a retired Chapter 11/workouit lawyer, I can assure you DEBT = death long term, and a daily drain on your psyche. Stay out of debt unless the prospect of "profit & positive cash flow" really, really justify it over at least 10 years.

Climb's picture

If you could help me with the "realistic rate of return for my IRA" that would be great!  

Clesthenes's picture

“This cuts the entire H1 estimate from 1.5% to 1.0%... shamed down to GDPNow’s reality.”

Gee, how can you arrive at reality by starting at a fiction?

Relax, if you examine publications issued by the Federal Reserve and federal government, they will freely tell you they fabricate rosy projections er, they fabricate lies when they discuss the GDP.

This index supposedly measures a country’s production of new capital; “supposedly” is the key word.

Societies across the globe have been destroying capital over the last 70 – 100 years while all observers believed the process was an example of production of capital.

Crazy, isn’t it?

This destruction is/was disguised by one simple word, “investment”.

For our purposes, “investments”, mean, money put in “plant, machinery or software”.  And what makes this so alarming is that this is a component of the so-called Gross Domestic Product, regardless of territory.

The money and resources expended on such investments are no longer available to anyone else.  They are entered on accounting ledgers as delayed expenses, with the anticipation that they will be “expensed” (or recovered) annually over the next 5-30 years.

In other words, the money and resources represented by such investments are lost forever – unless the business in question can recover such money and resources over those 5-30 years.

If ineptitude or lack of foresight intervene, the “delayed expense” is converted to a charge against profit/income: a massive write-off of capital.

Then there is the GDP component of government spending, which represents money spent on toilet seats, munitions and attendant bribery that will never be seen again – except what is stashed in off-shore banks by Congressmen and bureaucrats… and that as a minus.

These two components mean that, fully, 35% of the US GDP index is pure fluff.

This is the conclusion I reached by examining data, assumptions and formulas provided by the US Treasury, Federal Reserve and other sources.  There is more: street gangs and drug cartels, the federal government’s – and China’s – role in arming, protecting and forming alliances with such gangs and cartels… and a dozen or so other items.  They all point to a conclusion that a vast operation is being perpetrated…  I began this Part 2 (of my examination) with the question, ‘What financial shock do Judeo-Bolsheviks plan?  (Part one and Part two) Do they plan to inflate the dollar to zero… push stocks to a PE ratio 300, then slam them to a ratio of single digits or even minus numbers… repudiate the federal debt… replace Federal Reserve bank notes with Treasury bank notes…?’  And, how do China’s ghost cities (numerous examples of “delayed expenses”) fit into this unprecedented operation?

And, do Judeo-Bolsheviks (and Red China) plan a kind of chemical warfare against America?  And is the pathogen know as Endocrine Disruptors; which is present almost everywhere in the American environment?  It would be a most insidious agent; for, it mainly attacks the hormonal system of human beings; leading to feminization of men and masculinaztion of women, birth defects and many other adverse results.  Such an agent would be ideal; for, it destroys human beings and leaves property unaffected and available to redeem vast amounts of US Treasuries held by China, Japan, Oil Exporters, Caribbean Banking Centers (where US congressman have stashed their loot).

Consider all these government-provided facts and you see that throwing resources at “investments” (regardless of their disguise) is a kind of insanity that will inexorably usher in the next Dark Age – with a duration five times longer than the previous one, owing to the “monetization” (by central banking) of such “investments” beyond counting.

In other words, if popular perception of China (and any other country) is a solid sphere, the reality is little more than a balloon, with nothing but noxious gas inside.

ChargingHandle's picture

You don't need a weatherman to know which way the wind  blows  

whatisthat's picture

A 5th grader can do a better job at forecasts, besides all the economic statistics are manipulated by the establishment and do not represent actual results...