You can add New York Post columnist John Crudele
to the list of experts who believe that the Federal Reserve increased the uncertainty surrounding the timing of its first interest rate increase in its policy statement this week.
"Fed chief Janet Yellen ripped up the calendar Wednesday vis-a-vis a rate hike after the two-day Federal Open Market Committee meeting," he writes. The Fed dropped its forward guidance in the statement.
"It came as little surprise to markets after the Commerce Department announced earlier in the day that the nation's GDP in the first three months of 2015 barely rose, by an annual rate of 0.2 percent."
The figure would have been worse if it didn't include an estimate of deflation for the first quarter, which lifted the number. "So the revised GDP, when it's released on May 29, may be negative," Crudele says.
Markets now await next Friday's April jobs report. "During spring months, the Labor Department adds generous guesses as to how many jobs are created by new companies that it thinks — but can't prove — are just starting," Crudele writes.
"So, next Friday's number could be good enough to be at odds with the poor GDP report."
Meanwhile, financial luminaries offered plenty of pessimism in discussing the economy at the Milken Institute Global Conference this week.
Here's what a few of them had to say, as published by Fortune's Chris Matthews
- Former Treasury Secretary Tim Geithner, now president of private equity titan Warburg Pincus, offered this view on where the economy is headed in coming years: "we live in a scary, dark, messy, and uncertain world. That is the normal state of mankind."
- Mohamed El-Erian, chief economic adviser at Allianz, reiterated his concern that economies still aren't strong enough to thrive in the absence of support from central banks. "While the Fed is easing its foot off the accelerator a little, [other central banks] are pressing their foot even harder. So collectively, we're still in the central bank trade," he said. As a result, it's likely "we're going to have a major adjustment" in the next two years, El-Erian says.
- Real estate legend Sam Zell addressed the issue of slowing population growth in many developed nations. "This is the worst demographic situation we've had in 500 years," he said.
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