GDP Forecast Discrepancy Highlights Fed Model Divide

Conflicting Signals

According to Globe St, two Federal Reserve branches are offering sharply different GDP forecasts for US economic growth. The Atlanta Fed sees strong momentum, projecting 3.1% growth for Q3. The St. Louis Fed expects a much slower pace, with a 0.57% estimate.

This split creates confusion for analysts and investors, especially as the economy deals with high interest rates and mixed data.

Why the Discrepancy

The disagreement comes from how each Fed branch builds its model—not from opposing views on the economy.

• Atlanta Fed’s GDPNow relies on real-time data. The model mimics the BEA’s GDP calculations and updates automatically with new figures on jobs, spending, trade, and more.
• St. Louis Fed’s Nowcast uses a macroeconomic news index and a statistical forecast model. It interprets monthly data differently and doesn’t follow the BEA’s accounting style.

Both models aim to give early insight into economic performance but aren’t formal forecasts.

Why It Matters

This wide gap increases uncertainty for business leaders, investors, and policymakers. For commercial real estate, it complicates decisions around pricing, investment, and development. Many in the industry are already navigating slow deal flow and tighter financing conditions.

Looking Ahead

The BEA plans to release its first estimate of Q3 GDP on October 30. That official figure will offer a clearer picture of how the economy performed. Until then, expect analysts to watch new data and Fed updates closely.