Investing.com – The U.S. is set to release preliminary data on third quarter gross domestic product (GDP) at 8:30AM ET (12:30GMT) Friday, though the risk for markets may be to the downside with Federal Reserve (Fed) regional banks forecasting lower growth than expectations.
Consensus expects the reading to show a significant strengthening from the second quarter’s 1.4% growth to a 2.5% expansion.
As recently as Wednesday, analysts had been notching up their forecasts for economic growth.
Goldman Sachs raised its estimate to 2.9% from the prior 2.7%, while Barclays increased its projection to 3.0% from 2.7% previously.
However, estimates published by regional Fed banks showed lower expectations.
The latest Atlanta Fed projection released on October 27 was at 2.1%, while the New York Fed’s forecast from October 21 was for 2.2% growth.
Fed officials have indicated that interest rates could rise in December if the economy remains on track.
The U.S. central bank holds its next two-day monetary policy meeting on November 1 and 2 with markets currently only pricing in the odds of a rate hike at 8.3%, according to Investing.com’s Fed Rate Monitor Tool.
Analysts widely believe that the U.S. central bank will hold off on making a move next week due to the fact that the presidential elections take place shortly afterwards on November 8.
Fed fund futures currently place the probability of a move at the following meeting in December at 78.3%.
As markets looked ahead to the data, the US dollar index, which tracks the greenback against a basket of six major rivals, slipped 0.08% at 98.84 by 2:58AM ET (6:58GMT).
Meanwhile, U.S. stock futures pointed to a flat open. The Dow futures slipped 2 points, or 0.01%, the S&P 500 futures ticked down 1 point, or 0.02%, while the Nasdaq 100 futures dropped 4 points, or 0.09%.
Elsewhere, in the commodities market, gold futures traded up 0.04% at $1,269.95 a troy ounce, while crude oil fell 0.18%to $49.63.