28 Jun 2013
Flash: Does lackluster US GDP alter Fed timetables? – Investec
FXstreet.com (Barcelona) - According to Lee McDarby, Corporate Treasury at Investec, “The disappointment in recent US growth stemmed from the final Q1 GDP reading recording a downward revision to 1.8% from initial estimates of 2.4%.”
Indeed, US growth has been one of the key economic indicators, which has placed the US economy on a pedestal against its G7 western peers so this 0.60% being slashed will stop anyone getting too carried away just yet. In line with that, FOMC member and arch-hawk Jeff Lacker stated that after Bernanke’s testimony last month the market had got ahead of itself in relation to its expectation of the Federal Reserve tapering its QE operations.
Not to be outdone in the constant battle to deliver policy messages, Draghi and co from the European Central Bank also commented on the importance of exchange rates for their inflation outlook. “This is something to watch closely during next week’s ECB press conference.” McDarby warns. Last but not least on the policy front, George Osborne delivered his Spending Round yesterday in which he choose to use welfare budget savings and public sector pay in an attempt to limit the scale of some of the bigger spending reductions. Infrastructure spending is set to be increased across projects such as roads, railways, energy scheme’s and housing. This had very little affect on the pound due to the long-term nature of such projects and reforms.
Indeed, US growth has been one of the key economic indicators, which has placed the US economy on a pedestal against its G7 western peers so this 0.60% being slashed will stop anyone getting too carried away just yet. In line with that, FOMC member and arch-hawk Jeff Lacker stated that after Bernanke’s testimony last month the market had got ahead of itself in relation to its expectation of the Federal Reserve tapering its QE operations.
Not to be outdone in the constant battle to deliver policy messages, Draghi and co from the European Central Bank also commented on the importance of exchange rates for their inflation outlook. “This is something to watch closely during next week’s ECB press conference.” McDarby warns. Last but not least on the policy front, George Osborne delivered his Spending Round yesterday in which he choose to use welfare budget savings and public sector pay in an attempt to limit the scale of some of the bigger spending reductions. Infrastructure spending is set to be increased across projects such as roads, railways, energy scheme’s and housing. This had very little affect on the pound due to the long-term nature of such projects and reforms.