Is this even allowed? It appears S&P has joined the cynical, skeptical ranks of fiction-peddlers and has axed its economic outlook for the US economy.
“All told, we expect the repercussions from Brexit to weigh somewhat on U.S. GDP,” says S&P’s U.S. Chief Economist Beth Ann Bovino. “Combining this with lower-than-expected first quarter growth leads to the lowering of our forecast for growth this year and next.”
Furthermore, while S&P is dovish on 2016...
The Fed will now likely stay on the sidelines until the December FOMC meeting then will likely raise rates by 25 basis points
They go full hawkish on The Fed's next few years...
- S&P SEES FED RAISING RATES 3 TIMES IN '17, 3 MORE TIMES IN '18
As S&P details,
We expect growth of about 2.0% this year following 2.4% in 2015. During 2017-2018, we expect real GDP growth to average about 2.3%. This growth rate is supported by an ongoing improvement in both the housing sector and the labor market, with steady job gains putting unemployment at 4.7% in May.
The decline in shale energy investment stemming from lower global oil prices has weighed on both investment and near-term growth. However, that should reverse eventually given the removal of the export ban on U.S. oil exports. In addition, we expect continued competitiveness gains in manufacturing because of competitive labor costs and the lower cost of natural gas stemming from increased shale gas production. Also, deleveraging in the U.S. household sector is more advanced than it is for European sovereigns, and the U.S. banking system has bolstered its financial strength more through raising capital than deleveraging.
We also expect the moderation in fiscal drag at the federal, state, and local government levels (together, the general government) in 2014 and 2015 to continue to support growth given some near-term relaxation of the sequester caps following the Bipartisan Budget Act of 2015 (BBA2015).
Will the ratings agency get sued again?
Of course, S&P is still above consensus for 2016...