For those who do not understand what just happened:
First, Q1 2024 GDP growth slowed to just 1.6% which is less than HALF of the 3.4% Q4 2023 number.
This reading is roughly 50% BELOW Goldman Sach's expectations.
But it gets even worse.
At the same time, the US Core PCE Price Index soared from 2.0% to a staggering 3.7%.
This crushed estimates of 3.4% and further suggests that inflation is on the rise.
We have a weakening economy with rising inflation.
The worst possible outcome for the Fed.
What does the Fed do when inflation is rising but the economy is weakening?
If you cut rates, inflation will skyrocket. If you raise rates, economy crashes.
Not exactly the definition of a "soft landing."
Modify on 2024-04-25 23:41
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