Peter Schiff Says 'Bar Will Be Lowered Again' As Atlanta Fed Downgrades Q1 GDP Growth Forecast To 1.5%

The Atlanta Federal Reserve, on Wednesday, revised its estimate for real GDP growth in the first quarter of 2023 to 1.5%, down from 3.5% less than two weeks ago.

What Happened: However, Peter Schiff, chief economist and global strategist at Euro Pacific Capital, believes there is a possibility it could be lowered further.

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"Today the Atlanta #Fed lowered its forecast for Q1 GDP growth to just 1.5%. My bet is the bar will be lowered again by the time the preliminary number is released later this month. If the deflator accurately reflected #inflation’s effect on prices, GDP “growth” would be negative," Schiff tweeted.

In the fourth quarter, the GDP rose 2.6%, according to a third estimate from the Bureau of Economic Analysis. The number came in below economist expectations for a gain of 2.7%.

Economic Releases: Recent economic data have sparked concerns about the possibility of recession in the coming times. U.S. markets ended mixed on Wednesday after economic data releases sparked fears of recession among investors and traders.

The Institute for Supply Management said its non-manufacturing PMI declined to 51.2 last month from 55.1 in February indicating the services sector slowed more than expected in March, according to Reuters. At the same time, JOLTS report showed job openings fell 632,000 to 9.9 million on the last day of February, recording the lowest level since May 2021.

"The U.S. Feb. trade deficit rose to $70.5 billion, above the $68.7 billion expected. This will put downward pressure on GDP and the dollar, and upward pressure of consumer prices," Schiff said.

Photo: Courtesy of Wikimedia Commons

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