The Atlanta Fed's Q1 and Q2 GDP forecasts were virtually spot on with what the BEA ultimately reported. Which is why if its accuracy persists, not only the Fed, but Wall Street strategists suddenly have a very big headache on their hands.

Earlier today, the Atlanta Fed released its much anticipated first estimate for Q3 GDP. It was a doozy, at just 1.0%, or more than 2% below the consensus sell-side estimate.

If this is confirmed, not only are all rate hike bets off, but one may as well start the countdown to the recession, and more importantly, QE4.

From the Atlanta Fed:

Latest forecast — August 6, 2015

The first GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 was 1.0 percent on August 6. The model projects that lower inventory investment will subtract 1.7 percentage points from third quarter real GDP growth. Real GDP grew 2.3 percent in the second quarter according to the advance estimate from the U.S. Bureau of Economic Analysis.

In short, not only is this a disaster for the economy, but an even bigger disaster for the Fed which has now pegged itself into a rate hike hole, and can only unpeg it by destroying what little credibility it has left.