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Weekly Economic Report 4.26.24

After weeks of stronger than expected data, the initial estimate of first quarter real GDP was a disappointing 1.6% -- as surging imports sapped 1% from growth. Though real GDP was well below the final 2.7% forecast from GDPNow and Bloomberg’s 2.4% consensus, the market focused on the worse than expected inflation data, reducing expectations for easing in 2024 to just 35 basis points. At that level, we would argue that there is no real easing priced in anymore, rather just hedging of a strong equity market against any number of black swans. At this point we are more convinced than ever that the Federal Reserve will not move rates until after the election. We are less sure whether the next move will be a tightening or an easing. That will depend on the fiscal policy outlook post-election headed into 2025.
































EU04-26-2024
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