The US FOMC is playing the ole Shell Game with this past week's "SEP"!
Where is the Pea? (AKA US Consumer Final Demand Growth)
Shell One: Inflation NO HIGHER than 3% this year, 2.5% in 2027, and 2.2% in 2028.
Shell Two: Nominal GDP Growth of +5.2% in 2027.
Shell Three: NO Change in Unemployment Rate 4.4%, same in 2027 and 2028 (but maybe on tick higher to 4.5%), either way reflects virtually NO impact from AI.
Wild Card: Fed envisions a top-end Fed Funds Rate of FOUR PERCENT (3.9%) next year, based on growth in “real” GDP to 3% or higher!
There is NO PEA to be found…The Fed’s narrative is overly optimistic, an expert misdirection, yes. But one that flirts with the realm of being a “con”!
Either way…the Fed only wants, and needs, you to believe that the PEA IS THERE to be FOUND!
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