- If the numbers don't confirm the narrative, change the numbers. Failing to understand how Q1 GDP could have come in so weak (and so at odds with Fed forecasts and public utterances), a group of PhDs at the San Francisco Fed suggests issues with the BEA's seasonal adjustments.
- Applying a second set of seasonal adjustments, the San Francisco trio finds Q1 GDP growth of 1.8%, not the 0.2% initially estimated by the government.
- "We conclude that there is a good chance that underlying economic growth so far this year was substantially stronger than reported."
- Certainly long-dated Treasurys look to be believers - the yield has consistently risen in the face of weakish economic data over the past several weeks. Its up another seven bps today to 2.22%. TLT -1.45%
- ETFs: TBT, TLT, TMV, IEF, TBF, EDV, TMF, PST, TTT, ZROZ, TLH, SBND, VGLT, IEI, TYO, UBT, DLBS, DTYS, UST, TLO, VGIT, TBX, SCHR, TENZ, GSY, TYD, LBND, ITE, DTYL, DLBL, TYBS, DFVL, FIVZ, VUSTX, TBZ, DFVS, TYNS, SYTL
- Previously: Atlanta Fed Q2 GDP forecast dips (May 13)
- Previously: Goldman: Economy likely contracted in Q1 (May 5)