Any upside surprises could again derail the timing for Fed rate cuts, with the first currently expected to come in September.
That the U.S. economy is holding up this well in the face of decades-high interest rates is somewhat astounding.
While the country’s first-quarter GDP missed expectations, that was due to a surge in imports and a small build-up of inventories. Domestic demand, however, remained strong, business investment picked up and the housing recovery gained steam.
Economists at Wells Fargo touted the reading as a “wolf in sheep’s clothing”.
With just days to go before the next Fed policy meeting, it remains to be seen what Chair Jerome Powell will say this time.
Given the recent run of solid U.S. economic data, the narrative has changed not just to when the first rate cut could occur, but whether rate cuts may even come at all this year.
