The US economy expanded by a slim 0.2% in this year’s first quarter vs. the previous three-month period (seasonally adjusted real annual rate), the Bureau of Economic Analysis reports. The incremental gain is well below the consensus forecast (and The Capital Spectator’s median estimate). All of the major components in today’s release suffered, with one key exception: disposable personal income (DPI), which posted sharply higher growth in Q1 vs. last year’s Q4.
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Will the Federal Reserve drop new clues about the timing of the first interest rate hike in today’s policy statement at 2pm Eastern? Conventional wisdom suggests that the central bank will push out the date in the wake of sluggish economic data. “We think the statement’s downbeat growth description will reinforce the sense that a June liftoff remains a very long shot,” JPMorgan Chase economist Michael Feroli advised in a note to clients. Sounds reasonable, but it’s not obvious that Mr. Market’s fully on board with this outlook when we look at Treasury yields and the market’s implied inflation forecast.
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● Fed could give clues on first interest rate hike | USA Today
● US consumer confidence falls to year’s lowest level | LA Times
● Case-Shiller US 20-city home-price index up 0.5% in February | MarketWatch
● Richmond Fed: Mfg. in the central Atlantic region “remained soft in April” | BB
● UK GDP growth falls to slowest pace in three years | Telegraph
● Eurozone March M3 Growth Rises; Loans To Private Sector Recover | RTT