{"id":189453,"date":"2023-04-27T09:45:00","date_gmt":"2023-04-27T13:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=189453"},"modified":"2023-04-27T09:50:04","modified_gmt":"2023-04-27T13:50:04","slug":"us-gdp-growth-falls-short-of-expectations-in-q1-markets-react-to-potential-fed-policy-shift","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/us-gdp-growth-falls-short-of-expectations-in-q1-markets-react-to-potential-fed-policy-shift\/","title":{"rendered":"US GDP Growth Falls Short Of Expectations In Q1: Markets React To Potential Fed Policy Shift"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">ZINGER KEY POINTS<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The U.S. economy grew at a 1.1% rate in Q1 2023, far below what analysts predicted.<\/li>\n\n\n\n<li>Price pressures remained elevated during the quarter.<\/li>\n<\/ul>\n\n\n\n<p>The U.S. gross domestic product (GDP) increased at a 1.1%&nbsp;annualized pace in the first quarter of 2023, well below analyst&nbsp;expectations of 2% growth, according to advance estimates released Thursday by the Bureau of Economic Analysis.<\/p>\n\n\n\n<p>Markets were volatile after the release, with investors attempting to predict how the Fed will change its policies in response to the latest&nbsp;<a href=\"https:\/\/www.benzinga.com\/calendars\/economic\" target=\"_blank\" rel=\"noreferrer noopener\">economic data.<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What To Know:<\/strong>&nbsp;<\/h2>\n\n\n\n<p>The U.S economy expanded at a 1.1% q\/q annualized rate in the first quarter, behind market expectations&nbsp;and&nbsp;decelerating&nbsp;from&nbsp;the 2.6% reading in the fourth quarter of 2022.&nbsp;<\/p>\n\n\n\n<p>The increase in&nbsp;real GDP was reflected by increases in consumer spending, exports, federal government spending, state and local government spending&nbsp;and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed investment.&nbsp;<\/p>\n\n\n\n<p>The GDP price index, which measures changes in the prices of goods and services produced, increased 3.8%, more than the expected 3.7% and marginally lower than the 3.9% figure in the fourth quarter, showing that price pressures continued to hold last quarter.&nbsp;&nbsp;<\/p>\n\n\n\n<p>The current\u2011dollar GDP, also referred as nominal GDP, increased 5.1% at an annual rate in the first quarter, or $327&nbsp;billion, to a level of $26.47&nbsp;trillion. In the fourth quarter&nbsp;it rose 6.6%, adding $414 billion.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Market Reactions<\/strong>: <\/h2>\n\n\n\n<p>On the rates front, before Thursday&#8217;s data release, markets were pricing in a 75% likelihood of a 25-basis-point hike at the May 3 FOMC meeting and expected rates to remain on hold in June at a 60% probability, according to CME Group Fedwatch tool.<\/p>\n\n\n\n<p>Expectations for a rate hike in May slightly moved up to 78% Thursday, while June probabilities remained unchanged.&nbsp;<\/p>\n\n\n\n<p>Futures on the<strong>&nbsp;S&amp;P 500 index<\/strong>&nbsp;traded 0.3% weaker, indicating possibilities&nbsp;of another&nbsp;<a href=\"https:\/\/www.benzinga.com\/money\/most-volatile-stocks\/\" target=\"_blank\" rel=\"noreferrer noopener\">volatile<\/a>&nbsp;session for the&nbsp;SPDR S&amp;P 500 ETF Trust.<a href=\"https:\/\/www.benzinga.com\/quote\/spy\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted April 27, 2023 &#8211; <a href=\"https:\/\/www.benzinga.com\/economics\/macro-economic-events\/23\/04\/32045033\/us-gdp-growth-falls-short-of-expectations-in-q1-markets-react-to-potential-fed-po\">US GDP Growth Falls Short Of Expectations In Q1: Markets React To Potential Fed Policy Shift<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. gross domestic product (GDP) increased at a 1.1% annualized pace in the first quarter of 2023, well below analyst expectations of 2% growth.<\/p>\n","protected":false},"author":1128,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[77,4006,527],"contributors-categories":[13584],"class_list":{"0":"post-189453","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-fed","13":"tag-fed-policy","14":"tag-gdp","15":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>US GDP Growth Falls Short Of Expectations In Q1: Markets React To 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