The BEA will publish its first estimate of US Q1 GDP growth which is likely to be just 1.1%(qoq annualized), as growth was capped by weather, oil and the dollar. The principal question facing Fed officials today as they end their two-day meeting is to what extent the recent economic slowdown was indeed weather-induced. If weather is to blame, activity should snapback in the second quarter, increasing the Fed’s confidence that labor market progress willcontinue and that inflation will return to 2% over the medium-term. According to Societe Generale, the Fed to hike in September and December, and nevertheless expect the FOMC to maintain a very cautious tone in its post-meeting statement, doing little to dissuade the market from pricing only one rate hike this year.
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