The Fed made a policy mistake that began in 2013 and ran through last year. Now trying to undo the damage, with industrial (manufacturing) production having dropped two straight months, the odds of a June move are rapidly fading to zero (market probability is already around zero, but market sentiment can be volatile). Helping to push down the odds are a weak first quarter and, because it is not a weather created slowdown like last year, there is no natural set up for a strong bounce in the current quarter. If anything, the first quarter should’ve been a strong bounce off of a weak fourth quarter.
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