JPMorgan cuts US GDP estimates for 2022 and 2023

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JP Morgan cut its expectation for US real Gross Domestic Product (GDP) for the second half of 2022 and for 2023, per Reuters.

The details suggest that the firm’s economic and policy research department cut its second half view to 2.4% from 3% and cut its first half 2023 target to 1.5% from 2.1% and for the second half of 2023 it cut its view to 1% from 1.4%.

The forecast report also mentions, “It said there may be enough of a growth slowdown to lead to a gradual increase in the unemployment rate later next year, helping to relieve some wage pressures that have been building.”

In the end, the research led by economist Michael Feroli concludes, “In short, we forecast a soft landing, but are well aware that this outcome has rarely (if ever) occurred.”

FX implications

Fears of inflation and growth are omnipresent nowadays and exert major pressure on the risk assets. The same weighs on the Antipodeans and underpins the US dollar strength. That said, the US Dollar index snapped a three-day downtrend on Wednesday whereas the AUD/USD prices declined the most in a week the previous day, around 0.6970 by the press time.

Read: Forex Today: Dollar soars as Wall Street plunges