US fiscal and monetary policy summarized: Baffle them with B(L)S data. This is what happened most recently this morning, when as we noted the labor data is finally reverting to a far weaker trendline now that the weather effect first written about here in February, has been fully exposed. And if it was only that it would be case closed: more QE is coming, especially with headling PPI coming less than expected. However, we also had trade data that came in $6 billion better than expected, a number we said would result in imminent Q1 GDP hikes. Sure enough, here comes Goldman. “The US trade deficit declined to $46.0 in February following a deficit of $52.5bn in January. Most of the improvement reflected a sharp decline in real goods imports, which fell by 3.9% (month-over-month). We suspect that the weakness reflects in part seasonality related to the Chinese New Year holidays. Real goods exports also declined during the month, falling by 1.0%. On net, the report raised our tracking estimate of Q1 GDP growth to 2.5% from 2.3% previously.” So what is a poor Fed chairman to do to keep the goldilocks illusion going, yet have a QE way out? Well, blame China for a jump in GDP helps. For everything else we have the weather.