Will the Fed blame the weather this year
The US Climate Prediction Center was out with its latest advisory on El Niño today and said it may rank among the top-3 episodes of the weather phenomenon since 1950 and peak this winter.
It's a Pacific coastal effect but it chances the patterns right across the continent.
"Seasonal outlooks generally favor below average temperatures and above-median precipitation across the southern tier of the United States, and above-average temperatures and below-median precipitation over the northern tier of the United States," they wrote today.
For the past two years, the Fed has blamed winter snowstorms for soft US economic growth. It was a bit of a reach, no doubt. And they failed to credit the bounce back in growth after the winter as part of the same phenomenon and rather choose to believe that was the 'real' trend all along.
It's part of a broader psychosis where Fed members will believe just about anything so they can hang on to the fallacy that 3% growth is just around the corner.
In any case, the warm weather in the Northern half of the continent is the important thing to remember here. It doesn't snow in most of the South anyway.
The question is: Will the Fed discount stronger Q1 growth because of better weather? It's doubtful.
