US economy set for downward revision
26 August 2010 at 15:32
The latest report is due to reveal a "sharp" downward revision to second quarter growth in the world's largest economy.
According to the study, compiled by Caxton FX, US GDP will be revised down "significantly" from an initial estimate of 2.4 per cent to 1.5 per cent, following a long run of "disappointing" figures from the US economy.
Duncan Higgins, senior analyst at Caxton FX, said that this may result in intervention by the federal government, as the market has long been speculating that this will be needed to add further stimulus and avoid falling back into recession
"Recovery in both the housing and labour market has all but stalled and there is a good chance that a downward revision to GDP will spark further intervention from the Fed," he explained.
It comes after the latest Standard & Poor's Fund Services study showed that financials bounced back strongly in the MENA region despite a lack of consensus among fund managers on whether the worst is over for the industry.
Posted by James Harrison