Powell Q&A: A downside risk in GDP was a revision to GDI, but GDI was revised higher

Notes that a downside risk in GDP was a revision to GDIInstead, GDI was revised higherFed not in a hurry to cut rates quickly, will be guided by dataRate cut process will play out ‘over some time’ with no need to go fastFed will take everything into account at Nov meetingIf economy evolves as expected, it will mean two more cuts this year, totalling 50 bpsAs long as inflation in new leases is relatively low, it will eventually show up but it looks like it will take longer than we thoughtThe half-point cut in Sept was a reflection in inflation’s return to 2%

This is an important point and suggests that the Fed will be more hawkish. The GDI numbers were revised last week, after the Fed.

The Gross Domestic Income, an indicator that assesses economic activity based on income, showed stronger growth than initially reported. In the most recent quarter, GDI grew at a 3.4% rate, a significant upward revision from the 1.3% rate originally estimated. The previous quarter (January-March) also saw an upward adjustment, with GDI growth now reported at 3.0%, revised from the earlier estimate of 1.3%.

The change means that consumers will have more money to spend, keeping the economy strong.

This article was written by Adam Button at www.forexlive.com.