According to the Blue Chip survey, investment should grow at healthy rates, and productivity growth should remain strong. In these forecasts, the Federal Reserve is expected to keep raising short-term interest rates toward their equilibrium level. It all seems pretty healthy - what is there to worry about?
Related to this, home furnishings and renovations were two bright spots in an otherwise dim picture for retail sales at the start of the year. It is worth noting that the retail data may also have been affected by severe weather. Fourth, there have been several fiscal announcements since our last Report.