US OUTLOOK/OPINION: Atlanta Fed GDPNow Steady After Retail Sales, IP Data
Aug-15 16:16
The Atlanta Fed's GDPNow estimate for Q2 growth ticked up marginally Friday vs the previous update on August 7, though the expected composition of growth has shifted slightly.
- The new nowcast of 2.55% Q/Q SAAR is up from 2.53% for the highest estimate since end-July, largely because the estimate of real PCE rose 0.2pp to 2.2% - the strongest estimate yet for the quarter, and vs 1.4% in Q2.
- We had flagged this possibility following the solid July retail sales data (and importantly, upward revision to June) Friday morning. Additionally, equipment investment is seen at 3.7% (vs 3.5% in prior estimate, 4.8% in Q2).
- Conversely, nonresidential structure investment is seen a little weaker, at -3.5% (3.3% prior est, -10.3% Q2) with inventories contributing 0.08pp less (overall boosting GDP by 0.74pp, vs -3.17pp in Q2 amid tariff-related swings). That comes after weaker-than-expected industrial production data albeit in-line business inventories. Additionally, residential investment is seen rising just 1.1% (2.1% in prior est, -4.6% in Q2), potentially related to the 1.0% contraction in building materials sales in the retail sales report.
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US: Trump Rejects Reports Of Firing Powell, Keeps Door Open For 'Fraud' Reasons
Jul-16 16:12
President Donald Trump has addressed recent reporting that he could fire Fed Chair Jerome Powell, ahead of a bilateral meeting with the Crown Prince of Bahrain. LIVESTREAM
- Asked if he could fire Powell, Trump says: "He's always been too late... he should have cut interest rates a long time ago... The only time he cut them was to [benefit Democrats]... I think he does a terrible job..."
- Trump continues: "He's a terrible Fed Chair... We're not planning on [firing Powell], but we're very concerned."
- Trump says, noting the justification the White House is investigating for Powell's dismissal: "He's doing a little renovation [at the Fed's DC headquarters] for $2.5 billion. Building a renovation and they have a close to $900 million overrun, but the biggest overrun is the cost overrun for interest rates... We should be paying three points lower and would save a trillion dollars a year in interest..."
- Reiterates: "He's doing a lousy job, but we're not talking about [firing him]. Fortunately, we get to make a change in the next eight months."
- After downplaying reporting, Trump declined to "rule out" firing Powell but said it's highly unlikley, "unless there's fraud involved" with the Fed renovation - appearing to keep the option on the table.
- The implied probability of firing Powell in 2025 dropped from 40% to 20%, per Polymarket. However, it should be noted that Trump often misdirects the press before a major decision to maintain strategic ambiguity. For example, ahead of airstrikes on Iran.
CARNEY SEEKING A SOFTWOOD DEAL ALONGSIDE GLOBAL US TRADE PACT
Jul-16 16:04
- CARNEY SEEKING A SOFTWOOD DEAL ALONGSIDE GLOBAL US TRADE PACT
- CARNEY SIGNALS LUMBER QUOTA COULD BE PART OF ANY AGREEMENT
US TSY OPTIONS: Large Sep'25 10Y Put Spread Sale
Jul-16 15:57
- -60,000 TYU5 107/108 put spds, 5 ref 110-15.5
