US Economy Slows and Inflation Jumps, Damping Soft-Landing Hopes
First-quarter core inflation measure accelerates to 3.7% rate. Gross domestic product increased at a 1.6% annualized rate, below all economists’ forecasts, the government’s initial estimate showed. The economy’s main growth engine — personal spending — rose at a slower-than-forecast 2.5% pace. A wider trade deficit subtracted the most from growth since 2022.
The US growth rate is barely a third of Russia’s GDP growth. But if the Fed cuts rates to try to boost GDP, it risks bringing on higher levels of inflation and a collapse of the bond market... forcing it to ‘print’ more money to cover the feds’ deficits.
Death of the Bubble
If it doesn’t cut rates, it risks a recession/depression of unknowable severity... and the death of the bubble economy that its ultra-low interest rates, 2009-2021, created.
Inflate or die.
Bill Bonner
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