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Biggest Day for the Economy Ever

Wall Street will get some clarity on recession fears, inflation worries and interest rates Wednesday as the Fed’s rate decision and the first-quarter GDP report are both released.

First up will be the GDP report at 8:30 a.m. ET. The consensus is for an increase of 0.5%, which would be a positive -- although anemic -- number, CNBC’s Steve Liesman reported.

The real news will be in the details, though. If the number if higher than the consensus due to higher inventories, that’s a bad sign. An inventory build just means American retailers are buying more from overseas but consumers aren’t taking it off their shelves. But if the GDP number is higher than the consensus due to increased consumer spending, then that’s a very positive economic indicator – consumer confidence be damned.

After the market is given a few hours to digest the GDP, it’s on to the Fed decision at 2:15 p.m. ET. Liesman said the conventional wisdom is that Bernanke will cut interest rates by a quarter point and then signal a pause. It’s unlikely the Fed statement will indicate that “risks are balanced,” though. Instead, look for more of a “wait and see” attitude, according to Liesman. This decision will also be important to see how many members of the FOMC dissent and what they say.

The most bullish scenario, according to Jeff Macke, would be if the Fed decision and the GDP report were in sync – such as a rate cut coupled with a tepid GDP report. But if the economic number is hot and the Fed is still cutting? That’s a bad sign, Macke said.

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