The wrong headline on Retail Sales

It´s not, as the WSJ would have it that “Cooling Indicators Suggest Slower Recovery”, but that the slowing recovery is cooling indicators!

In mid-2010, the Fed consciously capped the recovery that had begun four quarters earlier, in June 2009. For the past two years, since it began its on/off threat of rate hikes, the already slow recovery is slowing down further. No wonder retail spending, industrial production and other spending categories are deflating.

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It´s not the Fed that is data-dependent, but the data that appears to be Fed-dependent. And there´s no end in sight to the Fed´s misguided reasoning, in particular when Boston Fed Rosengren, a bona fide dove, thinks he´s suggesting a “dovish hike” by saying:

 “A failure to continue on the path of gradual removal of accommodation could shorten, rather than lengthen, the duration of this recovery.” OMG!

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