US: Don't be surprised if real GDP growth in Q1 turns out to be negative – Wells Fargo By MSalordFX GDP UnitedStates Banks
although the economy does not appear on the cusp of another downturn, the probability of a recession next year is not insignificant. “We are not formally changing our projection of 0.6% annualized GDP growth rate in Q1-2022, but the risks to that estimate appear to be skewed to the downside. In short, we would not be surprised if the advance estimate of Q1 GDP growth, which the Bureau of Economic Analysis is scheduled to release on Thursday morning April 28, turns out to be slightly negative.
“Furthermore, the jump in inflation has caused the Federal Reserve to turn hawkish. As we wrote in a recent report, we look for the Federal Open Market Committee to raise its target range for the fed funds rate by 50 bps at its meeting on May 4. We also expect that the FOMC will hike by another 50 bps at its meeting in June and by an additional 100 bps by the end of the year. We also expect the Fed to start shrinking its balance sheet, which will act as a form of additional monetary tightening.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
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