It appears the Fed overestimates its abilities
The FOMC statement begins with:
"Information received since the Federal Open Market Committee met in March indicates that labor market conditions have improved further even as growth in economic activity appears to have slowed."
Why choose the word 'appears' instead of 'probably' or 'likely'? To me it reads like the Federal Reserve doesn't believe that Q1 growth was weak; that its precious forecasts could be wrong.
We'll find out in a few minutes exactly how strong growth was. The 'consensus' is +0.7% but after yesterday's trade data the market is probably priced for +0.8% or +0.9%.
In any case, the Fed has no right to criticize the accuracy of GDP forecasts. The Fed has been awful at economic forecasting for the past decade. Quarter after quarter they've overestimated growth.
Instead of spending yet-another quarter in denial, they might want to take a hard look at their models and assumptions. Maybe they could embrace a bit of humility and try to figure out what's gone wrong.
