US: Fed rate hike plans hit hard by GDP figures - ANZ

Research Team at ANZ, suggests that just at a time when evidence was building that the US economy was in a position for the Fed to again contemplate rate hikes, some weak domestic data or a global event quite quickly scuttle those plans.

Key Quotes

“The latest GDP figures certainly fall into the weak category, just as May’s non-farm payrolls release did. Fed Presidents Williams and Kaplan have both come out noting that it is just one data point and we shouldn’t “overact”. But the fact remains that many on the FOMC appear to be looking for excuses not to hike rather than the opposite, and the GDP figures give them that excuse.

Stepping back, it will no doubt see many more start to question the fundamental health of the US economy given that it is the fourth consecutive quarter of sub-2% annualised growth.”