Weekly Economic Snapshot: Inflation Heat Meets a Cooling Economy

Impact · against what's priced in

The macroeconomic data presents a stagflationary signal that is fundamentally bearish for broad equity indices. Unexpectedly high Core PCE inflation (3.0%) combined with a sharp GDP deceleration to 1.4% suggests a higher-for-longer interest rate environment amidst a cooling economy.

SPY−0.50

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In context

The combination of Core PCE inflation hitting 3.0% (the highest since early 2024) and Q4 GDP growth decelerating to 1.4% creates a dual headwind of persistent inflation and slowing economic momentum.

Read from the article alone

• gdp▲250%
• fed▲155%
• inflation▲33%
• RSP
• SPY
• consumer sentiment
• economic growth