US: Growth cooling back to potential – TD Securities

💡 DMK Insight

TD Securities’ forecast of a slowdown in US GDP growth to 2.3% for Q4 2025 is a wake-up call for traders. This projection reflects a broader trend of moderating consumer spending and tightening federal outlays, which could impact market sentiment and asset valuations. As growth expectations wane, sectors heavily reliant on consumer spending—like retail and discretionary goods—might see increased volatility. Additionally, a slowdown in GDP could lead to shifts in monetary policy, affecting interest rates and consequently the forex market. Traders should keep an eye on related economic indicators, such as consumer confidence and retail sales data, as these will provide insights into the sustainability of current market trends. On the flip side, if GDP growth holds above expectations, we could see a rally in equities and a stronger dollar. Watch for key resistance levels in major indices and currency pairs, particularly if economic data deviates from forecasts. The upcoming quarterly earnings reports will also be crucial in gauging market reactions to this GDP outlook.