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Friday I misspoke reporting the 3rd quarter New York Fed Nowcast at just 1.6%. The correct figure is 2.3% for the 3rd quarter. That said economic growth forecasts for the 3rd quarter, following the usual trend started out looking fairly respectable only to be cut sharply as the quarter came to a close, and I still think growth will struggle to beat 2%. This hasn’t stopped the Fed futures on interest rates from rising steadily and reaching 69.2% late last week. The official reason is that the Fed is concerned about excessive corporate leverage, which is true corporate leverage is very excessive. Frankly raising rates .25% or even .5% isn’t going to make much difference given how low rates are start with. Conversely raising rates significantly to reign in the speculative bubbles the Fed has created with its zero interest rate polices would all but guarantee severe economic dislocation, defaults and bankruptcies.

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