Fed’s Barr expects GDP growth to pick up in the second half of the year
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Comments from Fed’s Barr cross the wires: Expects GDP growth to pick up a bit in the second half of the year, from a 2% pace in the first half. Risks to achieving the inflation target have increased; risks to the labor market have receded. There is a need to recalibrate policy; b
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4 itemsFed's Barr: Further rate hikes are likely needed to ensure timely return to 2% inflation
US GDP disappoints despite consumer resilience
The desk interprets the recent US GDP report as a clear signal of economic cooling, which may prompt a reevaluation of Federal Reserve rate hikes going forward. As per the full note [source], the GDP growth came in at an annualized rate of 1.5% for Q2, below the anticipated 2%. This, alongside softer inflation metrics, suggests maintaining a back-foot position for the US dollar as traders digest the implications for future monetary policy. Additional consumer resilience noted within the report, particularly a 3.2% increase in consumer demand, may provide a buffer but also raises concerns over declining household savings rates. Without any immediate high-impact events on the economic calendar, focus will likely shift to upcoming releases that could further inform the dollar’s trajectory.
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