The most recent update for the Atlanta Fed GDPNow is sitting at 2%.
This number can of course still be revised lower thoughout the quarter should US data push lower.
But as it stands at 2%, it makes the case for 50bp (emergency) cuts from the Fed a bit of a strange one. Looking at the data I can't justify the need for 50bp cuts right now.
You cut 50bp at a time when the economy is showing signs of stress, which is not really the case right now. I suppose if you ask the recession crowd there will be plenty of data points that show some form of 'stress', but I think judging this cycle on past cycles is a futile endeavor as the economy is not the same after covid.
I think if the Fed cuts 50bp it will paint the wrong message about the economy, and could sound a bit of alarm bells for equities if that happens.
But anyway, for now money markets seems intent on the need/want for 50bp cuts, which means all eyes on the incoming labour data.
