Spot the year that the "data-dependent" Fed will raise interest rates...
[3]
(Bloomberg's US Macro index tracks economic data for the American economy accounting for both direction and beat/miss expectations - a lower index suggests weaker data and/or missed expectations, a higher index suggests stronger data and/or beat expectations) - this chart shows the average for the year.
With the world expecting a 2nd half recovery like the last 5 years, 2015 is not playing along at all...
[4]
...while one ISM number likely won't sway the Fed it's worth taking a step back and taking stock of some trends in the economic data.
If it seems to you that the US data has been disappointing for quite some time, well, you'd be right. In fact, the Bloomberg economic surprise index has been negative every day this year except the first two. To say that this year has been a bit of an outlier for economic disappointment in the 15 year history of the series is a bit of an understatement!
While it's worth stressing that the chart represents the data surprise relative to forecast, not the actual growth trend, it's really quite remarkable that an institution that keeps paying lip service to "the data" is finally preparing to hike when said data has disappointed expectations for the better part of a year straight.
* * *
Given Lockhart's comments this morning that:
- *LOCKHART: ECONOMY DOESN'T NEED EMERGENCY TREATMENT ANY LONGER
- *FED'S LOCKHART SAYS DEC. FOMC MAY BE `HISTORIC' MEETING
- *LOCKHART SAYS CRITERION OF JOB-MARKET IMPROVEMENT HAS BEEN MET
It seems like a done deal... especially after 4-sigma outlier spikes in ADP confirm it.
