The Q2 GDP report showed the economy “really bounced back nicely,” said Peter Cardillo, chief market economist at Rockwell Global Capital, in a phone interview this morning.
But he noted the GDP report also featured a higher inflation reading, and that could be sparking worries that the Fed statement at 2 p.m. will be hawkish, with central bankers signaling they might raise rates sooner than expected.
“I think that’s basically why the market is somewhat hesitant,” Cardillo told MarketWatch. The main benchmarks aren’t collapsing, but they’re also not moving up aggressively, he said.
He added that he thinks the Fed isn’t likely to raise rates sooner than expected, as it will keep in mind geopolitical risks and the fact that some of Q2′s strength was borrowed from Q1′s weakness.