Fed: Rate hike in December on the table if data point to renewed strong growth in Q4 – Commerzbank
|US Real GDP grew somewhat more strongly than expected in the third quarter. Economists at Commerzbank analyze how growth figures could guide the next Federal Reserve actions.
The Fed is still waiting for the economy to slow down
The US economy grew strongly in the third quarter, with real GDP up 4.9%. The strong growth in the third quarter had already been flagged by high-frequency data. The GDP release will thus not cause a change of monetary policy at next week's FOMC meeting.
The Fed is likely to keep key rates unchanged. For the Fed, however, it is important that growth slows down soon in order to reduce demand pressure. Otherwise, it is hard to imagine inflation weakening further toward the Fed's target.
If the data of the next few weeks point to renewed strong growth in the fourth quarter – which we do not expect – a rate hike in December would then be on the table.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.