How can everything be going well and at the same time all CBs contemplating more QE?

Reuters: Chance of a U.S. recession up, number of Fed rate hikes down

BENGALURU (Reuters) – There is a one-in-four chance of a U.S. recession in the next 12 months, a scenario that should keep the Federal Reserve from raising interest rates next month, according to a Reuters poll of economists who now expect only one rate hike this year.

Given a global economic slowdown and a dimming outlook for U.S. growth, economists said the Fed’s tightening cycle will likely draw to a halt before July.

While financial markets have recovered from a deep sell-off late last year, the Feb 8-14 poll of over 110 economists showed a cut to the outlook for U.S. economic growth and the number of Fed rate hikes this year and next.

“There is a lot of uncertainty and there are some good reasons to forecast a slowdown in 2019 as compared to in 2018,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

“It certainly does makes sense for the Fed to take a pause on policy to see how things play out, because it is not impossible for the economy to slow down in 2019 between weakening global growth, tighter financial conditions and fading fiscal stimulus.”

U.S. economic growth was forecast to slow and average 2.4 percent this year, a downgrade from January and the lowest since April last year.

 

Fed Gov. Brainard sees ‘downside risks’ increasing, says balance sheet runoff should end this year

Federal Reserve Governor Lael Brainard says “downside risks” are increasing for economic growth.
The central bank official tells CNBC the Fed “is in a good place” now. It has paused its interest rate hikes.
In addition, she says the balance sheet reduction program that began in October 2017 probably should end “later this year.”

Atlanta Fed slashes U.S. 4th-quarter GDP forecast to 1.5% from 2.7%

The U.S. economy’s estimated growth rate in the fourth quarter was slashed to 1.5% from 2.7% by the Atlanta Federal Reserve after declines in retail sales and inventories.

 

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