Fed rate cut in March looks less likely after GDP data, says economist
The U.S. economy pulled off another surprise in the fourth quarter with GDP eclipsing Wall Street forecasts.
Robust economic growth, however, also makes March look less likely as the start of a widely anticipated Federal Reserve pivot to interest rate cuts, according to Jeffrey Roach, chief economist for LPL Financial.
"As long as the job market holds up and disposable incomes stay healthy, the economy will avoid recession," Roach wrote, in emailed commentary, which included this chart of quarterly GDP growth since the Fed starting raising rates in March 2022, including a breakout of its major drivers.
While easing inflation "validates the Fed’s decision to implement the patient pause," Roach said the "still robust and broad-based" growth makes a March rate cut seems less likely, even though the next several weeks will also bring fresh economic data for the Fed to consider.
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