The Fed's concerned recent economic weakness might not be transitory

In one of her few speeches since joining the Fed in 2014, Fed governor Lael Brainard says "there may be reasons not to ignore the recent readings entirely. First, the limited data in hand pertaining to the second quarter do not suggest a significant bounceback in aggregate spending, which we would expect if all of the weakness in the first quarter were due to transitory factors. Private-sector forecasts of second-quarter growth are centered around 2-1/2 percent, while the Federal Reserve Bank of Atlanta's GDPNow forecast, which was quite accurate in its prediction of the first estimate of first-quarter GDP growth, is projecting second-quarter GDP growth of only 0.8 percent." Read the whole transcript here: (VIEW LINK) or the short version via the WSJ here: (VIEW LINK)

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