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US: Growth hard to come by – BAML

FXStreet (Delhi) – Research Team at BAML, note that the latest Fed projection for 2015 4Q YoY GDP growth was a surprisingly low 2.1%, given what we know about growth in the first and second quarter of this year, we can back out the implied average growth rate for the second half.

Key Quotes

“The result: the Fed only expects QoQ annualized GDP growth to average 2.0% in 2H15, well below our expectations for just under 3% growth, and that of the economists' consensus.”

“Why is the Fed so pessimistic? The Fed is in part concerned about the strain from a stronger dollar and weaker global growth. Although it is challenging to gauge the exact drag, most economists would agree on a GDP hit of around 0.5-1.0ppt from a 20% USD appreciation.”

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