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9 Apr 2013
Forex Flash: US GDP expected to slow in Q2 and Q3 - Nomura
FXstreet.com (Barcelona) - Nomura economists have taken a look at the US economic outlook and believe that GDP growth will slow in Q2 and Q3.
They believe that the slowdown will follow as the economy absorbs a new round of cuts in government spending. They are expecting capital expenditures to pick up gradually in response to lower uncertainty around the outlook. Further, ample economic slack, apparent in the high rate of unemployment and unused capacity, should restrain inflation.
They write, “We expect the FOMC to continue its long-term asset purchases through the third quarter of 2013, and taper purchases thereafter. A strengthening of the housing market should support investment, job creation, and aggregate demand, (while) the slowing pace of global growth and contractionary US fiscal policy are the key risks to growth.”
They believe that the slowdown will follow as the economy absorbs a new round of cuts in government spending. They are expecting capital expenditures to pick up gradually in response to lower uncertainty around the outlook. Further, ample economic slack, apparent in the high rate of unemployment and unused capacity, should restrain inflation.
They write, “We expect the FOMC to continue its long-term asset purchases through the third quarter of 2013, and taper purchases thereafter. A strengthening of the housing market should support investment, job creation, and aggregate demand, (while) the slowing pace of global growth and contractionary US fiscal policy are the key risks to growth.”