Final GDP Q-Q (Quarter over Quarter)

Final GDP Q-Q (Quarter over Quarter)

19 dec 2024. 01:30 PM GMT / 08:30 AM EASTERN //07:30 AM CENTRAL;

Final GDP Q-Q (Quarter over Quarter) measures the change in the value of goods and services produced by an economy from one quarter to the next. It’s a way to gauge economic growth or contraction over a short period. It is released by the bureau of economic analysis and measures the inflation adjusted value of all goods and services produced in the economy.

Key Points

PREDICTIONS

The final U.S. GDP (Gross Domestic Product) figures for the fourth quarter of 2024 are expected to be released today. The previous estimate for Q3 2024 showed an annualized growth rate of 2.8%. Analysts are forecasting a slight decline in growth for Q4, with expectations around 2.5%.

why FOMC cares about final GDP q-q?

The Federal Open Market Committee (FOMC) closely monitors final GDP Q-Q because it provides a comprehensive snapshot of economic activity and health. Here are a few reasons why it’s important:

1. Economic Growth Assessment: Final GDP Q-Q helps the FOMC gauge the pace of economic growth. Strong growth may signal a robust economy, while weak growth could indicate potential issues.
2. Inflation Insights: GDP growth can influence inflation. Higher growth can lead to increased demand for goods and services, potentially driving up prices. The FOMC uses this data to make informed decisions about interest rates to manage inflation.
3. Policy Decisions: The FOMC uses GDP data to adjust monetary policy. If the economy is growing too quickly, the FOMC might raise interest rates to cool it down. Conversely, if growth is sluggish, they might lower rates to stimulate economic activity.
4. Market Expectations: Financial markets closely watch GDP data. Positive data can boost market confidence, while weaker data can lead to market volatility. The FOMC considers these reactions when making policy decisions.

By analyzing final GDP Q-Q, the FOMC can better understand the current state of the economy and make decisions that promote stable economic growth and low inflation.

Impact on Financial Markets

1. Stock Market: Positive GDP data can lead to stock market rallies, as it suggests strong corporate earnings and economic expansion. Negative data can trigger sell-offs due to fears of economic slowdown.
2. Bond Market: GDP data influences interest rate expectations. Strong growth can lead to higher interest rates, causing bond prices to fall and yields to rise. Weak growth may lead to expectations of lower rates, boosting bond prices and reducing yields.
3. Currency Market: Strong GDP growth can attract foreign investment, leading to a stronger currency. Weak GDP data can result in a weaker currency as investors seek better returns elsewhere.

Policy Implications of Final GDP q-q:

Monetary Policy: The GDP data is a critical input for central banks when making monetary policy decisions. Traders anticipate how central banks might adjust interest rates based on GDP figures. For example, strong GDP growth might prompt rate hikes to prevent overheating, while weak growth could lead to rate cuts to stimulate the economy.
Inflation Insights: GDP growth can impact inflation. Higher growth can lead to increased demand and higher prices, prompting traders to adjust their inflation expectations and investment strategies.
Economic Forecasting: GDP data helps traders forecast future economic conditions and make informed decisions. Accurate GDP forecasts can lead to better trading strategies and investment outcomes.

Key Information

Issuer: bureau of economic analysis
Last data: 2.8%
Expected data: 2.5%
Date and time : 19 dec 2024. 01:30 PM GMT / 08:30 AM EASTERN //07:30 AM CENTRAL;
WHAT WE EXPECT: Fed decision to keep lesser interest rates lesser has kept the dollar higher, other markets fell as a ripple effect. Poorer than expected GDP numbers will further strengthen the dollar pushing the markets down.