Deja Vu: Atlanta Fed GDP Forecast Plummets Right on Schedule

Atlanta Fed growth forecast has plummeted from 2.7 percent to 0.5 percent in a couple of weeks. I went back to see the prior two quarters and its the same pattern. Both forecasts dumped right about now. There's an explanation for this. The model makes an estimate for the quarter based on very little data, so it's mostly an estimate. As data comes in, the estimate gives way to real data. In a nutshell, the estimates plunge right about now because the tipping point between estimated data and real data is crossed, as well as the Fed modelers aren't pessimistic enough with their initial settings. I don't fault them for that though, since it doesn't matter. Their model is dynamic and more accurate than the trash mainstream economists.