Know The Difference Minute

Remember, the economy was coming off its best performance since ’84, up 6.9%.

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The economy shrinks.
Welcome to the Know the Difference Minute for Thursday, April 28th.
Gross Domestic Product is the measure of goods and services over a 3-month period. 1st quarter GDP expectations weren’t high, but today’s 1.4% drop took some by surprise. Remember, the economy was coming off its best performance since ’84, up 6.9%.
COVID played a large role. So did the Russian war. Inflation is still flashing red. Consumer spending was up but prices were up more. There also is a growing trade deficit. In Q1, imports increased by nearly 20% but exports fell 6%.
Current market pricing indicates the equivalent of 10 quarter-point rate hikes by the end of the year. That would take the Fed’s benchmark interest rate to about 2.75%.
Economists still largely expect the US to avoid an outright recession, but risks are rising for a less-than-soft landing.
I’m Dave Spano from Annex Wealth Management. That is your Know the Difference Minute.