Slow, but Steady

You’ll pardon my ignorance; I guess that I really don’t get out much.  When I read this morning that China’s GDP has dropped to a 25 year-low rate of growth at 6.9% I almost fell off of my chair.  The Fed’s target rate for the U.S is a 2.0-2.5% annual growth and we have averaged 3.25% from 1947 to 2015.   As long as I have been following things, we’ve never been above 5.0% growth. The chart you are looking at is not an EKG of someone climbing up the oxygen depleted three flights of stairs in my building, it’s the rate of Gross Domestic Product change in the United States over the last 65 years.  Incidentally, our all-time high (and all time low) was back in the 50’s at +16.9 and -10 respectively.

China’s declining GDP is indicative of economic challenges deeper than just the recent downturn in their stock market.  Evidently, becoming a world superpower is harder than it looks.

Fed Fund Futures show an 8% chance of a hike this month, a 35% chance of a hike in March and a 54% chance of a hike in June