25 May 2023
If you are covering the revision to the Q1 statistic for US GDP, as well as the ongoing debt ceiling talks, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“Following last month’s disappointing data print on the United States’ Q1 GDP, we have today seen a slight revision upwards, suggesting the US economy might not be heading quite for the dire straits people were fearing this time in April. What this latest statistic does indicate, however, is that the US economy is still in growth mode, and is still probably a little too hot for the Federal Reserve’s liking, and as such we have to anticipate another rate rise at its next meeting.
“What complicates things here, however, is the US debt ceiling talks, which if all goes well we should begin to see some white smoke on a deal very soon if they are to meet the potential 1st June deadline. With ratings agencies monitoring the credit worthiness of the US closely, any failure to reach a deal will have a profound impact on both markets and the US economy. This is an added headache that the Fed could do without in its battle to bring inflation back to target. Despite inflation beginning to fall by the wayside, we are in for another bumpy few weeks and months before volatility begins to ease and markets can act a little more sanguine.”
