GDP Report Clips Doves

In the calm before the storm Tuesday , the markets were sanguine ahead of the year's first Fed Open Market Committee meeting and a deluge of data. As the data streams in Wednesday morning, traders are letting their nerves show.

For good reason -- economic growth accelerated at faster-than-expected 3.5% pace in the fourth quarter of 2006 and that's with a growing drag from the residential housing market. Housing activity fell 19.2%, topping the third quarter's 18.8% decline. The consensus had expected growth at 3% in the fourth quarter. The data brings the pace of growth for all of 2006 to 3.4%, greater than the 3.2% growth in 2005.

"What slowdown?" quips Michael Darda, chief economist at MKM Partners. ...