The Atlanta Fed Pres. Bostic is speaking and says:
- The current degree of uncertainty has broadened considerably
- Tariffs are an aspect of uncertainty; challenging to figure out how to incorporate it
- Because things are changing so rapidly the most important thing to do is ask questions of business contacts, look at possible other outcomes
- Fed needs to keep a sense of how businesses and families might react to changing conditions
- Fed’s emphasis is still on inflation
- Fed needs to get to 2% for the credibility of the institution
- the US can support a much tighter labor market than was previously understood
As an aside, the Atlanta Fed GDPNow growth estimate for Q1 rose to 3.9% from 2.9% (it’s initial estimate). In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is 3.9 percent on February 3, up from 2.9 percent on January 31. After recent releases from the Institute for Supply Management and the US Census Bureau, the nowcasts of first-quarter real personal consumption expenditures growth and real gross private domestic investment growth increased from 3.0 percent and 4.8 percent, respectively, to 4.1 percent and 6.5 percent.
The next GDPNow update is Wednesday, February 5. Please see the “Release Dates” tab below for a list of upcoming releases.
For Q4, the Atlanta Fed model forecast growth of 2.3% and that is where the initial advance reading of GDP came in. Well done Atlanta Fed
This article was written by Greg Michalowski at www.forexlive.com.
