Powell Accepts to Revise GDP Higher, As CB Consumer Confidence Confirms the Economic Boom in US - Forex News by FX Leaders

Powell Accepts to Revise GDP Higher, As CB Consumer Confidence Confirms the Economic Boom in US

Posted Tuesday, February 23, 2021 by
Skerdian Meta • 2 min read

Earlier today Jerome Powell said that the economy was loosing steam, so the FED will continue the expansionary monetary policy. But, the economic data in recent months has shown otherwise, a booming economy. The CB consumer confidence report earlier showed further improvement, beating expectations. forcomg Powell to revise the 2021 GDP expectations higher later on.

US consumer confidence data for Feb 2021

  • February Conference Board consumer confidence 91.3 points vs 90.0 expected
  • January CB consumer confidence was 89.3 points (revised to 89.9)
  • Expectations 90.8 points vs 91.2 prior
  • Present situation 92.0 points vs 85.5 prior
“After three months of consecutive declines in the Present Situation Index, consumers’ assessment of current conditions improved in February,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “This course reversal suggests economic growth has not slowed further. While the Expectations Index fell marginally in February, consumers remain cautiously optimistic, on the whole, about the outlook for the coming months. Notably, vacation intentions-particularly, plans to travel outside the U.S. and via air-saw an uptick this month, and are poised to improve further as vaccination efforts expand.”

Comments from Powell

  • We will update 2021 GDP growth forecast to the range of 6%
  • Current forecast is 4.2%
Private forecasts have been rapidly rising given strong January data on stimulus (despite the pandemic surge in January).
  • Some parts of the commercial real estate market are under pressure, it’s not clear if that’s temporary or lasting
  • Watching commercial real estate very closely
  • Overall response to climate change has to come from elected officials
  • Repeats that Fed is in favor of standardized climate disclosures
  • Does not have an opinion on asset price bubbles
  • We expect ‘enthusiastic spending’ to boost inflation but it won’t be particularly large or persistent
  • Inflation risks are to the downside
There have been no signs whatsoever in this testimony that anything has changed or that Powell is any less dovish.
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