Forex Field Guide for US Dollar (SEP 2022 GDP update)

Reference guide covering Fundamental, Sentiment and Technical factors of the US economy

FUNDAMENTAL SUMMARY

-FEDERAL FUNDS RATE-

The rate was set on September 21st to between 3.00 and 3.25 percent after an expected 75 bps hike. Fed chair Powell had previously said that 2.25-2.50 was the neutral rate and so this is now intended to tighten the economy, ie. slow the rate of inflation by slowing the rate of growth through more expensive borrowing.

The outlook for interest rates is hawkish as next year in 2023, the FOMC projects 4.6 percent while Trading Economics forecast4.75 percent.

The next FOMC meeting is on Wednesday the 2nd of November.

-GROSS DOMESTIC PRODUCT GROWTH RATE (GDP)-

The final estimate for Q2 over Q1 printed on September 29th showed a contraction of 0.6 percent as expected and 1.0 percent higher than Q1 over Q4 (-1.6). Two quarters of negative growth is a technical recession.