13 Feb 2015
Soft US data might trigger a lower revision for Q4 2014 GDP – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team expects the recent soft trade and inventory data in the US to trigger a lower revision for the Q4 2014 GDP towards 2%.
Key Quotes
“Some pullback from US’s Q4's heady growth pace would not be so surprising. Moreover, due to recent trade and inventory data, Q4 GDP is expected to be revised lower toward 2%, while estimates for Q1 are being trimmed toward 2.5% from 3.0%.”
“We are not convinced that this will materially impact next month's FOMC meeting.”
“The US economy was growing above trend, which is seen as closer to 2.0-2.25%, given labor force growth and trend productivity.”
“Policy making is also forward looking. Just like the unexpected contraction in Q1 14 GDP did not alter the Fed's tapering path, at this point we continue to think the odds favor the Fed modifying its forward guidance ("patience") in next month's statement that will keep a mid-year hike as the central scenario.”
Key Quotes
“Some pullback from US’s Q4's heady growth pace would not be so surprising. Moreover, due to recent trade and inventory data, Q4 GDP is expected to be revised lower toward 2%, while estimates for Q1 are being trimmed toward 2.5% from 3.0%.”
“We are not convinced that this will materially impact next month's FOMC meeting.”
“The US economy was growing above trend, which is seen as closer to 2.0-2.25%, given labor force growth and trend productivity.”
“Policy making is also forward looking. Just like the unexpected contraction in Q1 14 GDP did not alter the Fed's tapering path, at this point we continue to think the odds favor the Fed modifying its forward guidance ("patience") in next month's statement that will keep a mid-year hike as the central scenario.”