On Tuesday (August 16), local time, the Atlanta Fed’s GDPNow model showed that the U.S. GDP growth rate in the third quarter was expected to be 1.81%, which was a sharp reduction of 0.64 percentage points from the 2.45% expected on August 10, and the reduction rate was close to 25%. . The U.S. housing starts data in July was significantly lower than the previous value and expectations, which was the main reason for the downgrade. Previously, the U.S. GDP in the second quarter fell by 1.6% year-on-year, recording negative values for two consecutive months, entering a technical recession .
Also on Tuesday, Brian Diess, director of the White House National Economic Council, said that reducing inflation is the most important thing for the government at the moment, and there is no doubt that the U.S. economy is in a transition period . Diess said the U.S. housing data was an expected result of the Fed’s tightening policy, and concerns that high inflation would tip the U.S. into a recession were offset by positive economic data, including a 3.5 percent unemployment rate and a better-than-expected July industrial output. Uncertainty remains in the next 6-12 months.
Whether the U.S. economy will fall into a true recession is still a topic of debate on Wall Street.
Roubini, an economist known as “Dr. Doom,” said that given the most aggressive monetary tightening by the Federal Reserve in decades, the U.S. economy has only two options: a hard landing or persistently high inflation .
Goldman Sachs chief economist Jan Hatzius also believes that it is difficult for the Fed to prevent the U.S. economy from falling into a deep and painful recession, which is a hard landing .
The U.S. could slip into a recession early next year , but it’s still some distance away from the moment when the Fed needs to seriously worry about the state of the economy , Commerzbank FX analyst You-Na Park-Hege said in a note . There is also great uncertainty about how much the U.S. economy will weaken, so it seems premature to reflect the recession in the dollar.