By Andrew Moran

Have the Federal Reserve’s 23-year-high interest rates finally filtered into the US economy? Investors are spooked after the latest not-so-good GDP report, resulting in a triple-digit nosedive on Wall Street during the April 25 trading session. Once the Bureau of Economic Analysis (BEA) released the first-quarter numbers, murmurs of stagflation popped up on social media. But was this minor turbulence in the path to a soft-landing, or is something else brewing?

The US economy expanded 1.6% in the first quarter, down from 3.4% in the previous three-month span. The GDP reading fell short of the consensus estimate of 2.5% and represented the lowest print since the second quarter of 2022. Personal savings tumbled to 3.6%, while real (inflation-adjusted) disposable income jumped 1.1%, down from the 2% gain in the October-December span.

BEA numbers pointed out a slowdown in consumer and government spending. Personal consumption rose 2.5%, down from 3.3% in the fourth quarter and below the 3% forecast. But the debt-fueled binge accounted for nearly all of the growth in the January-March period.........

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