Markets Handed Stagflationary GDP Report
The US economy grew less briskly than expected in Q1, the advance read on first quarter growth, released on Thursday, showed.
The 1.1% pace fell well short of the 1.9% consensus estimate. The range, from nearly six-dozen economists who ventured a guess, was 0.4% to 3.5%.
It was the slowest annual rate since last year's non-recession, when consecutive quarterly contractions were written off as meaningless for the purposes of recession-spotting.
As a quick, but always helpful, reminder: There
Until inflation is under control, GDP growth and the possibility or occurrence of recession(s) should be irrelevant to the Fed. I remember the 1970s and 1980s and the Fed cannot afford the previous policy errors on inflation.
You have to be 60 to understand what stagflation is in the US. It took more than three decades for inflation to resurface so it’s not a phenomenon a lot of investors are familiar with.