Goldman Sachs lowered its second-quarter GDP tracking estimate to 1.7% from 1.8% following the PCE report.

That follows the massive downward revisions to Q1 growth yesterday (1.8% from 2.4%).

If Goldman is right, GDP will have grown at a 1.75% annualized pace in the first half of the year. In order to meet the Fed`s forecast of 2.45%, growth in the final two quarters of the year will need to average 3.15%. In the past 13 quarters, the economy has only grown that quickly once.

The Fed is habitually overoptimistic, so much so that I`m starting to believe it`s on purpose. Perhaps they think companies will invest and consumers will spend if they believe the Fed`s illusions.