💥US real GDP unexpectedly fell 0.3% y/y in Q1, fueling recession fears.*

U.S. real GDP in the first quarter of the preliminary annualized decline of 0.3%, market expectations for growth of 0.3%, a record low since the second quarter of 2022. The U.S. economy contracted in the first quarter, with companies hoarding imported goods to avoid rising costs a major drag, underscoring the damaging impact of Trump's chaotic tariff policies. This will exacerbate market fears of a recession and put bets of aggressive Fed rate cuts back on the table, favoring a return to all-time highs for gold prices.

💥US April “small non-farm payrolls” fell well short of expectations.*

US ADP employment rose by 62,000 in April, the smallest increase since July 2024, sharply lower than the 115,000 expected. Meanwhile, on Tuesday, US JOLTS job openings fell to 7.19 million last month from a revised 7.48 million in February, the lowest level since September last year. The data suggests that demand for labor is weakening as employers have put spending plans on hold until they have a clearer picture of Trump's policies.

💥“The Fed's favored inflation gauge,” the PCE price index, is expected to cool, but is unlikely to affect the prospects for a rate cut.*

The median forecast, based on CPI, PPI and import data afterward, shows that US core PCE growth is expected to have slowed to 0.08% YoY in March from 0.4% in the previous month, while headline PCE is expected to have declined marginally by 0.1% YoY to be nearly flat.

⏩The PCE report is unlikely to affect the monetary policy outlook, with Trump's massive tariff hikes likely to break the recent trend of moderating price gains. Policymakers are expected to leave rates unchanged at next week's policy meeting. Fed Chairman Jerome Powell has repeatedly claimed that the labor market is in “solid” shape; he recently said it is necessary to keep inflation in check to ensure maximum employment -- a key condition for a rate cut.

👉U.S. Merchandise Trade Deficit Hits Record Amid Tariff Threats!