[video] Quick Take: GDP Growth Not Sustainable
NEW YORK (TheStreet) -- TheStreet's Debra Borchardt spoke to Peter Cardillo, chief market economist at Rockwell Global Capital, about the final GDP report for the third quarter as well as Friday's stock rally.
The third-quarter GDP figure was revised to 4.1%, much better than many economists had expected. However, Cardillo suggested today's rally could also be attributed to the monthly options expiration day.
He said many traders began covering last week and earlier this week but there is still a fair amount of open interest in the market, helping to drive equity prices higher.
As for the GDP figure, it's nice to see but can't be sustained, he said. Much of this quarter's growth came from a big build in inventories as well as a boost in spending.
Cardillo said that throughout 2014, we should see GDP growth near 3% to 3.5%, which will allow the Federal Reserve to leave its monetary policy unchanged.
However, should GDP greatly exceed economists' expectations, the Fed will be forced to raise interest rates, which would be a "game changer," Cardillo said.
-- Written by Bret Kenwell in Petoskey, Mich.