US: Growth set to decelerate to 1.7% in Q3 - CIBC

On Wednesday, before the Federal Reserve interest rate decision, growth data from the third quarter will be released in the US. Katherine Judge, analyst at CIBC affirms they expect a reading of 1.7% (annualized), below the 2% from the previous quarter. 

Key Quotes: 

“The US economy appears to have felt the deterioration in global economic conditions and trade policy uncertainty in Q3, with growth set to decelerate to 1.7%. Capacity opened up in the industrial sector of the economy, and business investment indicators point to a contraction in capital spending for the second quarter in a row.”

“Lower interest rates are working to support housing market activity, and residential investment appears to have contributed to growth for the first time since 2017.”

“The continuation of uncertainty surrounding US-China trade policy could limit capital spending in Q4, a reason for the Fed to cut interest rates at their meeting next week.”

“We are slightly above the consensus which could be bullish for the USD and bearish for fi xed income.”