SYLD

These Three Metrics Tell A Story About The U.S. Economy

Major US indices down for the month, NASDAQ-100 hit with a 7.10% drawdown. Inflation, GDP, and unemployment are the big three metrics used to approximate the trajectory of the U.S. Economy. This month, the Consumer Price Index rose by 3.48% year-over-year. The Federal Funds Rate is expected to stay at current levels.

The Odds For Rate Hikes May Have Increased Dramatically

Inflation is accelerating, with core PCE and PCE Supercore rising at higher rates. Consumer inflation expectations are increasing. The current policy stance may need to shift from rate cuts to rate hikes if inflation continues to rise. The odds for rate cuts in 2024 are melting away.

Fed Meeting Preview: Unexpected Macro Data Likely To Alter Fedspeak

US economy grew at 1.6% in Q1 2024, the slowest rate of growth in seven quarters. The latest GDP print came in lower than expected while inflation has inched up. Changes in Fedspeak are anticipated as the Fed meets this week. The Fed's preferred measure of inflation is still the labor market.

Consumers Splurge On Services, Fixed Investment Surges, Imports Drag On GDP And There's A Blip In Government Spending

Wolf Richter: In Q1 2024, consumers spent very vigorously on services, but not so vigorously on goods. Imports and government spending dragged on GDP, but we think the slowdown in government spending was just a blip. Inflation re-accelerated sharply in Q1, and GDP grew less than in Q4. Gross private investment jumped at fastest rate in two years.

GDP Update: Moderate Growth And Disinflation Continue

Real GDP is growing at about a 2.2% annual pace. On a year-over-year basis, the deflator rose only 2.4%. The economy today is about 20% smaller than it could have been. Calafia Beach Pundit sees no reason to worry about a near-term recession.

M2 Still Points To Lower Inflation

Between The Lines

U.S. GDP Growth Slows Markedly, And Inflation Remains The Focus

U.S. GDP growth slowed to 1.6% annualised in the first quarter of this year. But inflation is hotter than expected, with the core PCE deflator up 3.7%. Inflation makes a near-term Federal Reserve interest rate cut look less likely. First quarter GDP growth is well below the 2.5% consensus.