The Atlanta Fed has released its initial growth estimate for the third-quarter GDP at 2.3%. The second-quarter GDP, released at 3.0%, was closely anticipated by the Atlanta Fed, which estimated a growth of 2.9%. <\/p>\n
Their model, regarded as a reliable predictor, initially saw market economists forecasting 2.4%. The volatility in early estimates is notable, with fluctuations expected to reduce as more data becomes available. <\/p>\n
The first estimate for the third-quarter real GDP growth (seasonally adjusted annual rate) stands at 2.3% as of 31 July 2025. This follows the US Bureau of Economic Analysis’ announcement of second-quarter growth at 3.0%, slightly above the Atlanta Fed\u2019s final projection. <\/p>\n
Updates to the GDPNow estimate are scheduled, with the next one being on 1 August. For additional release information, refer to the dedicated “Release Dates” section.<\/p>\n
We just saw a solid 3.0% GDP growth for the second quarter, which beat most forecasts. The Atlanta Fed’s model, which was very accurate for Q2, is now pointing to a slower 2.3% for the third quarter. This initial number suggests the economy might be losing some steam heading into the second half of the year.<\/p>\n
With this early forecast being so volatile, we expect to see a rise in implied volatility. Traders should consider buying options, like puts on the SPX, to hedge against a potential market dip if future data confirms this slowdown. Looking back, we saw the VIX spike over 20 during the regional banking jitters in the spring of 2024 when mixed economic signals first appeared; we could see a similar reaction.<\/p>\n
This GDP forecast comes right after the July CPI report showed core inflation finally dipping to 3.1%, slightly below what was expected. While the jobs market is still robust with a 3.6% unemployment rate, the last report from early July showed wage growth cooling for the second straight month. The Federal Reserve is watching this closely, and any sign of a real slowdown could soften their hawkish tone from the last meeting.<\/p>\n
We are looking at defensive sectors like utilities (XLU) and healthcare (XLV) to outperform if this growth scare takes hold. Conversely, it might be time to use derivatives to hedge or take bearish positions on cyclical stocks in the industrial and consumer discretionary spaces. These sectors are most sensitive to a slowdown in spending and investment.<\/p>\n
The market is already starting to price in a lower chance of another rate hike this year. Traders in SOFR futures are beginning to position for the possibility that the Fed’s peak rate is already in. We saw a similar pivot in late 2018 when the Fed backed off its tightening cycle as growth concerns mounted, causing a sharp rally in bonds.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Atlanta Fed estimates Q3 GDP growth at 2.3%, following Q2\u2019s 3.0% and revised projections.<\/p>\n","protected":false},"author":62,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27823","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=27823"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/27823\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17021"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=27823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=27823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=27823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}