Kelly Evans: Where the strength is in this market

Kelly Evans: Where the strength is in this market

Let's talk about three data points since that nerve-wracking Fed meeting yesterday that help explain why the central bank is doing what it's doing.  (1) . It just surged % last quarter, versus the 5.5% estimate. For the year, the economy grew at 5.7%. And that's in "real," ex-inflation terms. Add in the price gains, which were 4% for the year the way Commerce calculates it, and it means nominal GDP surged nearly 10% last year. That's higher than the 4% pace it was meagerly advancing last decade, when the Fed had to keep reversing course on its tightening plans. And keep in mind, as of this moment, the Fed is still doing quantitative easing! For an economy booming 10%, and a prime-age employment-to-population ratio that has recovered in just two years to 79% as of December--something it took to reach last decade, despite a higher starting point, as MKM's Michael Darda keeps pointing out. "In short, the Fed is behind the curve," he writes. (2) . First it was Microsoft, up yesterday on strong earnings despite the ugly post-Fed market action. Its cloud business grew "only" 46% year-on-year, but the CFO said the segment will see growth "acceleration"