Rates Hold, But For How Long?
As inflation trends down and GDP contracts, pressure mounts for the Fed to finally make a move
Happy Friday! Brian Manning here with your weekly update—let’s get right to it.
GDP Update
On Thursday, we saw the second read on GDP. The data showed that GDP was down by 0.2%, and it also revealed that consumer spending is pulling back. Honestly, this doesn’t come as a surprise.
As a reminder, two consecutive quarters of negative GDP officially signals a recession. We’re not there yet, but we’re watching closely to see how the next quarter shakes out.
Inflation Update: PCE
Today’s big news was the Personal Consumption Expenditures (PCE) report—this is the Federal Reserve’s preferred gauge of inflation.
The numbers are encouraging:
- Year-over-year inflation dropped from 2.3% to 2.1%
- Inflation is clearly moving in the right direction
Despite this positive trend, I’m honestly surprised the Fed hasn’t started lowering rates yet. Based on their history, they tend to react slowly—they were slow to raise rates during the inflation surge, and now they’re slow to bring them back down.
Bottom Line
- Inflation is improving
- GDP is softening
- Consumer spending is declining
- The Fed is still on hold—for now
I’ll be watching it all closely and will keep you posted as we get more data.
Let’s Connect
I’m around all weekend—available 7 days a week from 8 AM to 8 PM. If you have any questions about the market, mortgage options, or planning your next move, don’t hesitate to reach out.
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