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

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...