Quote:
Originally Posted by CoachKandSportsguy
This release does not include the effects of actual tariffs, but more reflects the chaos and confusion /uncertainty around the size, purpose and impact of impending tariffs.
Inflation deflator higher than expected, so next step is recession, barring no changes in policies. Most trade policies take quarters to come to an executable agreement.
So backward accounting looks are a deteriorating economy, and the Fed will not try to save the economy right away, and treasury bonds may become more risky to hold, so interest rates may rise more than expected.
Holding Treasuries, the question for why the bonds will move:
1 - inflation higher? = bonds down/rates up
2 - recession? = bonds up/rates down
3 - US Dollar down? = bonds down / rates up
good luck to us!
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Why would the Fed lower rates when inflation is worse than ever? We going to give money away for free, (crazy low interest rates), and expect inflation to improve?
AI Overview:
A GDP deflator higher than expected means that the prices of goods and services included in Gross Domestic Product are rising faster than anticipated. This indicates a higher rate of inflation than what was projected, potentially impacting economic growth and stability.