A SURPRISING START TO THE KEVIN WARSH ERA 1/3

06 Jul

A SURPRISING START TO THE KEVIN WARSH ERA 1/3

Posted by BearBull Group In Investment Insight 0 comment

The final upward revision of Q1 US real GDP to +2.1% masked deep structural vulnerabilities, as growth was artificially driven by involuntary corporate inventory accumulation rather than real demand. Service spending collapsed from an initial +1.8% estimate to a meager +0.5%, while overall personal consumption contributed just +0.3%. High tariffs, an aggressive energy price rebound, and a historic Q4 government shutdown successfully drained momentum from the consumer base, leaving the economy dependent on unsold stock.

Key Points

Economic resilience will fade in Q2
The stagflation anticipated for Q2 is materializing
The momentum of the services PMI is a cause for concern
The job market is weakening and returning to a downward trend
The Fed enters a new era under Kevin Warsh
Inflation stabilizes at high levels over the summer
Rising volatility and bond yields
Investors’ sustained enthusiasm for the dollar
The surprising paradox of the stock market

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