Fed Forecasts GDP Decline Of Only 1.2%

With the latest interest rate hike by due later today, it's worth noting that the Atlanta Fed's GDP Nowcast is calling for a 1.2% decline in the nation's GDP.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -1.2 percent on July 27, up from -1.6 percent on July 19. After recent releases from the US Census Bureau and the National Association of Realtors, the nowcast of the contribution of inventory investment to second-quarter real GDP growth increased from -2.50 percentage points to -2.30 percentage points, while the the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth increased from 0.18 percentage points to 0.59 percentage points.

Whether the Fed will take note of its own prediction and moderate today's rate hike will be known shortly.