US economic growth stumbled in this year’s first quarter, according to this morning’s estimate from the Bureau of Economic Analysis (BEA). The government’s first release of the Q1 GDP report revealed a weak gain of 0.5% (seasonally adjusted annual rate)–less than half the pace of the already sluggish 1.4% rise in last year’s Q4. A key factor behind the economy’s slowest quarterly advance in two years: softer consumer spending.
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The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a hike in June is lurking… maybe. “This latest [FOMC] statement has not laid out a strong position for a June rate hike,” Bill Irving, a Fidelity portfolio manager, tells Reuters. Meanwhile, the Treasury market is sending mixed signals. On the one hand, yields ticked lower, perhaps in anticipation of a weak first-quarter GDP report that’s due later today. But then there’s the sight of the Treasury market’s inflation expectations rising to the highest levels since last summer. It all adds up to a strange brew of market signals.
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● Fed signals no rush to hike rates as economy hits soft patch | Reuters
● Forget June. The Fed isn’t likely to hike until Dec | CNBC
● US Pending home sales +1.4% to 10-mo high in Mar | MarketWatch
● US mortgage applications fell 4.1% last week | HousingWire
● Bank of Japan shocks markets by voting against more stimulus | Guardian
● Be Afraid, Be Very Afraid If Investing for the Long Run | Bloomberg
● Is Gold More Productive Than Cash? | Merk Investments