US Week Ahead: Fed Rate Decision And Q2 GDP Are Key Topics, According To Moody's

 The much-anticipated Fed rate hike decision and the anticipated US advance Q2 GDP are both given a detailed preview by Moody's Investors Services this week.

Key Quotes

"The second quarter's GDP, which our high-frequency GDP model indicates is on track to decline 1% on an annualised basis, will be among the important figures that will be released. Additional source data will be available prior to the advance estimate, but it's still expected that the GDP declined for a second straight quarter.”

"Variable and frequently mean-reverting components, net trade and inventories, are to blame for the GDP's weakness so far this year, whereas domestic final sales and gross domestic product have fared considerably better. A recession is defined by the National Bureau of Economic Research, the de facto arbiter of U.S. recessions, as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators," and GDP is just one of many factors that it takes into account.”

“Additionally, the Federal Open Market Committee (FOMC) of the Federal Reserve meets this week. The statement is due at 1800 GMT on Wednesday, July 26, and Fed Chair Powell will address at a news conference at 1830 GMT.”

"In terms of monetary policy, the Federal Reserve will probably raise the fed funds rate's target range by 75 basis points. Prior to the Federal Open Market Committee meeting, no information was made public that would likely encourage the committee to raise interest rates by 100 basis points.”