13 March 2026
If you are covering the revised Q4 US GDP data, please see the following comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“The latest US GDP estimate has halved the annualised rate of growth for the fourth quarter from 1.4% to 0.7%. Indeed, the rate for the whole of 2025 was revised downwards too, indicating that the US economy is slowing more than expected, and that perhaps both consumer and business confidence is weaker than hoped. This data gives a good indication of the health of the US economy in the lead up to the Iranian conflict.
“Given the strength of US energy security, it is insulated somewhat from the energy price shock being experienced in global economies right now, but regardless there will still be an impact. The US is doing all it can to mitigate against the rising oil price, knowing that it will push inflation up and prove to be a brake on the economy. The worry here is that stagflationary effects can become clearer, making the job of the Federal Reserve incredibly difficult. Such weak growth would usually result in rate cuts becoming apparent, but events in the Middle East mean we are more likely to be back in a holding pattern, waiting for clear signs that either the conflict will end or will drag on for years. For now that certainty is not available.
“The latest personal consumption expenditures inflation figures also highlight prices remain sticky in the US, with the core figure coming in at 3.1% and the overall rate above target. For now, there is likely to be a pause on Wednesday’s interest rate decision, but after that it could very much depend on the influence of incoming Chair Kevin Warsh.”
