Rumours of the demise of the US economy have been greatly exaggerated. Now that credit is flowing more freely and the fiscal drag has faded, the recovery will strengthen.
Nevertheless, given how skittish Fed officials are, this could be used as yet another reason to delay the first rate hike until some time in the second half of this year.
"First-quarter GDP growth is going to be a disappointment. We estimate it will be about 1.5% annualised. Led by a resurgence in real consumption and nonmining investment, we expect GDP growth to accelerate to 3.5% in the second quarter." - said Capital Economics
