QQEW - Atlanta Fed Confirms Economic Slowdown

• The Atlanta Fed GDPNow model has reduced the estimate for third-quarter GDP from over 6% to 3.7%.
• Inflation increased too early in the expansion and real growth is declining.
• A 3.7% increase in real GDP still leaves the economy with a 2.2% gap relative to the pre-COVID trend.
• Tightening monetary policy into a declining growth rate environment with an existing GDP gap is going to prove difficult.
• Watch for a flattening yield curve and an increase in the US dollar.

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