John Robertson

Expectations about future activity in the Philadelphia Fed mid Atlantic region are as strong as they have been for 10 years. See my chart of current activity and future activity diffuson indexes since 1969 at (VIEW LINK). The surprisingly strong reading while the US government has been partially shut down suggests the US economy is set to expand more strongly but for the politics blocking improvement. The politics of uncertainty is likely to lead to a GDP cut in the last quarter of 2013 and could also affect the first part of 2014 adversely when all the budget and debt matters are scheduled for renewed debate. The only silver lining is that tapering might be off the agenda for several months. FOMC governors may be reluctant to start making changes without knowing what the legislators are going to do next.


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