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Next week, the Federal Reserve of the United States (Fed) will announce its interest rate decision. Based on the last hints given by its Chair, Jerome Powell, and other FOMC members, the Fed will likely be on hold.
But one should not be surprised to see a hawkish tone from the Fed. That is especially true since inflation picked up in September, and the Q3 GDP surprised positively.
In other words, there is no reason not to sound hawkish, let alone to signal rate cuts. Hence, higher for longer should be the prevailing message from the Fed next week.
The question, however, is how much is already priced in the market? Given that the Q3 Real GDP came out at 2.9% YoY, the strongest number since Q1 2022, surprises might still appear.
US Real GDP just slightly below the pre-COVID trend
There are a number of remarkable things to highlight in today’s GDP data. First, the economic momentum continues, with only a few signs that it will moderate in the near future (e.g., real business investment dropped in Q3 2023).
Second, real final sales increased by 3.5%. Third, the Real GDP rose at the strongest pace since Q1 2022.
Moreover, durables increased by 7.6%, while non-durables increased by 3.3%.
Overall, the US economy keeps growing at a pace other nations only dream of. Hence, the way to express this bullish view might be to keep buying the world’s reserve currency – the US dollar.
The post US Real GDP rose the fastest since Q1 2022; should you buy the dollar? appeared first on Invezz
