Despite a strongly rebounding U.S. equity market this year, Tuesday’s U.S. consumer confidence print came in much worse than expected, missing the mark by the widest margin since 2015. The survey data tends to follow the equity market, which makes this divergence another sign of weakening U.S. consumption growth. Unless more is done by policy makers to keep the equity market afloat, U.S. growth likely will continue to trend lower, as the bond market has been indicating. Global economic conditions have been warranting Fed dovishness some time, but we should expect Fed rhetoric to acknowledge weakening domestic conditions.
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