Weekly Market Commentary 06/23/2017

With the data spotlight focused almost exclusively on housing this week, the disparate opinions about the health of the broader economy continue to be unresolved. No one disputes that growth is rebounding from the first quarter’s tepid 1.2% pace, but estimates of the pick-up vary far and wide. The two Federal Reserve Banks that run widely-followed, and continuously updated, GDP tracking models – The Federal Reserve Banks of Atlanta and New York – are exceptionally wide apart, with the former pegging second-quarter growth at 2.9% and the latter at 1.9%. At this juncture, we are closer to the Atlanta estimate of roundly 3%, but recognize the downside risks stemming from some disappointing economic reports in recent weeks. Indeed, both Reserve Banks have lowered their growth estimates from those made earlier in the month.