Bank of America says strong economic growth in the US means the FOMC ‘can afford to wait’

Greg had the US growth data for Q2 here:

• US GDP Advanced for Q2 2.8% vs 2.0% estimate

2.8% vs. 2% expected is a huge beat.

Bank of America says the economy “remains on robust footing”. Got that right.

In brief from their note:

• 2Q US GDP growth … even stronger than our above-consensus forecast of 2.3%, and our final tracking estimate of 2.4%
• upside surprise on growth was supported by strong consumption growth of 2.3%
• Overall, the economy continues to disprove skeptics. Growth has certainly cooled relative to last year, but it has done so at a gradual pace. The risk of a sharp slowdown is low, in our view.
• the headline print is a clean signal of where underlying momentum is in the economy. Again, we are cooling but gradually.
• The Fed can afford to wait
• We continue to expect the Fed to start cutting in December
• September has moved closer to the baseline given recent incoming data that point to cooling in labor markets and a return to disinflation

This article was written by Eamonn Sheridan at www.forexlive.com.