How Much Will U.S. GDP Ultimately Grow in Q3?

Core Insights - U.S. economic growth is projected to be 3.3% for Q3 2025, indicating a significant increase in optimism regarding consumer resilience and business investment [1][2][4] Economic Growth Predictions - Traders on Kalshi predict an 83% chance of growth exceeding 2.5%, a 63% chance of exceeding 3%, and a 37% chance of exceeding 3.5% [1] - This forecast represents a notable increase from the advance GDP estimate of 3% for Q2 2025 [2] Market Sentiment and Implications - The Kalshi contract reflects reduced recession fears, suggesting a potential rebound in GDP driven by inventory restocking, federal spending, and strong consumer demand [4][5] - A GDP growth rate of 3.3% could support the "soft landing" narrative, which has positively influenced the stock market, particularly benefiting cyclical sectors like industrials, financials, and consumer discretionary [6] Investor Positioning - Equity investors may view the GDP forecast as a signal for risk-on positioning, especially following a strong earnings season [7] - The S&P 500 Index has risen nearly 40% from its year-to-date lows, with upcoming GDP data expected to be a major catalyst for U.S. stock performance for the remainder of 2025 [7]