Yet Another GDP Dispute...What's the Fed Really Planning?

Mish Shedlock  |

Disputes over GDP go on and on and on. MarketWatch reports that by another measure, the US economy was ho-hum in second quarter: 

That may look significant, but let's investigate further...

On a year-over-year basis, it's hard to discern any gap. The dispute of Chief US Economist at MFR Josh Shapiro is easily seen as total nonsense. I don't believe the economy is as strong as most claim, but I certainly won't post easily disproved charts to make my point. 

Still, one has to wonder "What's really on the Fed's mind?" I surely doubt it is fear of inflation, at least as they claim to measure it. It's possible they fear bubbles, but I doubt that too. The Fed has historically been blind to bubbles.

Rather, I suspect they have come to the conclusion this recovery is as good as it gets, and if they cannot hike now, they will not be able to. That may sound lame, but it is exactly how economic clowns think. Let me phrase it this way: "We need to hike now so we have ammunition to cut when we need to."

Meanwhile, nothing the Fed says at all is believable, if for no other reason than historical precedent that proves without a doubt that they clearly have no idea what's really going on, especially at turning points.

They cannot really come out and say "We are clueless bubble blowers," can they?

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