The trend is clear: the US economy is rapidly slowing down, in large part due to the “depressurization event” among small and medium regional banks, that has seen loan issuance grind to a halt.
There was an almost palpable gasp of surprise at 830am ET when the BEA reported that in Q1, real GDP rose just 1.1% (1.070% to be precise), barely above the lowest estimate, and a big drop from the 2.6% GDP in Q4. It was also the lowest GDP print since Q2 2022 when growth was negative to the tune of -0.6%.
But while growth came in well below expectations, what the market was really freaked out about was the unexpectedly hot PCE and core PCE prints, the former coming in at 4.0% above the 3.7% expected and higher than the 3.9% in Q4, while core PCE came in at 4.9%, well above the 4.4% in Q4 and also hotter than the 4.7% expected. In fact, as shown below, this was the 5th consecutive “beat” of median core PCE expectations.
From oil markets to treasury stacking, backdoor QE, investor fantasy and hedge fund prepping, it’s becoming more and more clear that the big boys are bracing for disaster as gold stretches its legs for a rapid run north.
https://goldswitzerland.com/so-many-open-signs-of-financial-disaster-ahead-and-gold-working/
Jeremy Powell says that a US recession is likely. “This is what it takes to get inflation down.” By cooling off the economy and cooling off the labor market (killing jobs) inflation comes down. We don’t know of any painless way for inflation to come down.
https://www.nytimes.com/2023/04/27/business/economy/fed-powell-russia-prank-zelensky-video.html
Gross domestic product, a measure of all goods and services produced for the period, rose at a 1.1% annualized pace in the first quarter, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had been expecting growth of 2%.
https://www.cnbc.com/2023/04/27/gdp-q1-2023-.html
70% of Americans are feeling financially stressed, per CNBC.
— unusual_whales (@unusual_whales) April 27, 2023
h/t DOORBERT