GDP growth slowed sharply in Q1, is this a cautionary sign?
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Fact of the matter is without increased government spending, the gdp numbers would have much flatter. That's why people have unease about the economy is because although the current signs are good, we're in this awkward phase where the Fed and Congress are counteracting each other and debt increases. It's all a push to get us passed 2024, then I think the gas pedal will be lifted some and both inflation and growth will both fall, at least that's what I hope happens.
Having Q1 slower than Q4 does set up slowing economy. Watch if Q2 ends u[ slower. Watch if another weak retailer (Walgreen) files for bankruptcy. This may be the "soft landing" everyone was expecting.
Watch inflation in Q3 maybe rise to 3% level for this year's COLA.
With the election in November maybe rebound by then but who knows.
Could be cautionary sign. Can't cut taxes more. Need energy prices to be lower, with more production.
3 quarters of declining GDP will result in Fed cutting rates. They keep saying the economy is good but won't crunch the numbers. When the actual recession starts or become full fledge it will be unstoppable or difficult to help without massive rate cuts. If Powell wants to be Volker then he may well be remembered like Volker.
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