On July 28, the United States Bureau of Economic Analysis (BEA) will release its advance estimate of second-quarter GDP growth. The impending announcement has observers on the edge of their seats, with many expecting it to confirm that the US economy slid into recession in the first half of 2022. But even if the announcement seems to say that, the reality is more complicated.
The recession prediction is based on two assumptions: first-quarter growth was negative, and a recession is defined as two consecutive quarters of negative growth. As a result, if second-quarter growth is estimated to have been negative, the stock and bond markets could react by rising in the very short run. A recession might lead investors to believe that the US Federal Reserve will ease up on its aggressive interest-rate hikes.
Already a subscriber? Log in
Read the full story and more at $9.90/month
Get exclusive reports and insights with more than 500 subscriber-only articles every month
ST One Digital
$9.90/month
No contract
ST app access on 1 mobile device
Unlock these benefits
All subscriber-only content on ST app and straitstimes.com
Easy access any time via ST app on 1 mobile device
E-paper with 2-week archive so you won't miss out on content that matters to you