The Index of Small Business Optimism fell 0.3 points from February, falling to 92.6. Statistically, no change. Four of the 10 Index components posted a gain, six posted small declines, the biggest gain was in Expected Business Conditions, a 4 point improvement to a still very negative number. For a broader perspective, the Index has turned decidedly “south” over the last 15 months falling from a reading of 100 in December 2014 to 92.8. A “chartist” looking at the data historically might conclude that the Index has clearly hit a top and is flashing a recession signal. The April survey will decide whether or not the alarm should be rung. This month’s change was not statistically significant, just not in a positive direction.

Apparently, New York Federal Reserve President William Dudley’s walk back of prospects for a second rate hike in Hangzhou last month was not satisfactory, so Chair Yellen added her support to keeping the status quo. Financial markets applauded, but the real sector did not, with consumer and small business sentiment falling.

Financial markets of course thrive on the variability such policy pronouncements and policies produce. Bonds have been made very unattractive by Federal Reserve policy, so equities are the only game in town that might promise a yield. Low interest rates are great if they occur in an economy that presents investment opportunities. This is not the case for our current economy. There is no cheerleader for the economy who convincingly promises improvement. There is little hope that government will constructively address the problems that concern consumers and small businesses. The most likely prospects to assume the presidency don’t appear to be connected to reality. There is no prospect that the avalanche of resource-wasting regulations will abate much less be reversed. The “experts” at the Federal Reserve only raise uncertainty with their pronouncements and seem detached from the real economy, focused instead on financial markets. Two of our largest states have passed a $15 minimum wage, preventing millions of lower skilled and young workers from ever getting their first job. None of this makes sense to Main Street businesses or many consumers who think government economic policies are “bad” by a 2 to 1 margin. The “mess” we are now in is the cumulative result of decades of misdirected, special interest policies, attempts to redistribute income and manipulate private sector firms with volumes of regulations and taxes.

The Fed continues to confuse and confound. It is unsettling that the Fed (a) is trying to create inflation when historically managing inflation was the central bank’s job (b) will do anything, including negative interest rates, to pursue this 2% objective without questioning the sense of it and (c) continues to think that its low interest rate policy will create jobs when the uncertainty the Fed creates holds spending back. Low rates are not sufficient to stimulate hiring and spending if investing in workers or new capital shows little promise of paying off. The Fed has not been able to attain either its goal of 2% inflation or “maximum employment” (whatever this is) with its policies, yet it keeps on going (remember the definition of insanity?).

The small business sector, which historically produced half of our private GDP and served as the “R&D” sector of our economy (this is where new ideas are tested by markets, the proper evaluator, not government), is underperforming, doing little more than operating in maintenance mode. Slow economic growth is now just a result of population growth, more haircuts, retail customers, health care patients, etc. But there is no exuberance, no optimism and not much hope, the numbers make it clear.