Fed President Goolsbee Shifts to a More Cautious Approach on the Economy: Signs of Weakness and Concerns about a Demand Slowdown.

On Tuesday, I was drawn to the remarks made by Chicago Fed President Austin Goolsbee as he took a more cautious approach to discussing the economy. In his recent comments, Goolsbee expressed concerns about warning signs that suggest a weakening real economy. Over the past year, he had been discussing the possibility of a ‘golden path’ or soft landing, but now his stance has shifted to a more cautious one, stating that it is still possible. Given his dovish stance, it’s not surprising that he is one of the first to raise growth concerns.

Two charts in particular stand out as evidence of this shift in the economy. The first chart is the Bloomberg US economic surprise index, which measures economic data against consensus expectations. Following the ISM services number falling far short of the consensus, this index hit a nine-year low, indicating that economists may have been too complacent about growth. The second chart is the Atlanta Fed GDPNow tracker for Q2 growth, which shows a significant decrease in growth projections to just 1.5%.

I am closely monitoring further corporate commentary regarding a potential demand slowdown and eagerly awaiting the release of the non-farm payrolls report on Friday. This report will serve as a key indicator of the overall health of