The Atlanta Fed's GDPNow nowcasting model lowered its third-quarter US real GDP growth estimate to 3.5% from 3.6% the prior week, following the latest batch of economic data releases. The marginal downgrade signals that incoming indicators are running slightly softer than the model previously anticipated, though the estimate remains well above trend growth. For the dollar, a still-robust growth reading supports relative yield expectations versus the euro area, where growth has been weaker, so the adjustment is unlikely to shift the USD-EUR rate differential materially on its own. Equity sensitivity is more concentrated in growth-heavy indices such as the Nasdaq-100, where a modest decline in the growth outlook can feed into discount-rate assumptions, while the VIX tends to remain subdued when nowcasts stay firm and recession fears are absent. The next catalyst for traders is the scheduled monthly retail sales and industrial production releases, whose revisions and consumer spending components will determine whether the GDPNow estimate drifts further lower.
US ATLANTA FED GDPNOW MODEL SEES US Q3 GDP GROWTH RATE AT 3.5%, VS. 3.6% LAST WEEK, AFTER LATEST ECONOMIC REPORTS
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