MAJOR ECONOMIC SHIFT UNDERWAY
Part 1: The Impact Is Significant — Here's What You Need to Know
Over the past 48 hours, we've received critical data on the U.S. economy:
Key Market Shifts:
Investors now anticipate four consecutive rate cuts (June, July, September, and October).
The chance of a fifth cut in December has jumped to 33.1%, signaling growing urgency.
Yesterday’s Recession Warning Signs:
Job openings dropped sharply from 7.48M to 7.192M — the weakest reading in 4 years and below expectations.
Consumer confidence fell for the fifth month in a row, hitting lows not seen since early COVID.
The Atlanta Fed is now forecasting a GDP contraction.
Today's Data Pushing for Stimulus:
GDP slipped from +2.4% to -0.3% — two straight negative quarters = recession.
Non-farm payrolls plunged from 147K to 62K (vs. 114K expected).
Core PCE inflation came in at 0% (vs. 0.1% expected).
Annual Core PCE fell to 2.6%, down from 3%.
Note: Core PCE excludes food and energy and is the Fed’s preferred inflation metric.
Market Reactions & Fed Watch:
Still, markets are reacting negatively across the board.
With both weak data and slowing inflation, rate cuts appear increasingly justified.
If the Fed holds off, political motives may be at play — remember, they cut rates 0.5% pre-election in 2020 without major economic stress.
