But, based on the above data and more, they may have some damn good reasons to hold, grip, and squeeze all the hope that they can.
In headline terms, the big takeaways from this morning’s report were 1) Growth is accelerating, 2) Inflation is slowing, and 3) Americans are saving (just a bit) more. But not only are those occurring, but they’re also occurring in excess—and in some instances, well in excess—of economist expectations.
GDP growth was only anticipated to sit around 2% flat for the quarter. However, thanks to strong consumer spending fueled by a tight labor market that recently drove wages and salary increases at a rate faster than inflation, we managed to topple that estimate.
That’s great and all, but obviously, no one cares about what actually happened, just what’s going to happen, and we think (more like hope) recent trends can help answer that.
Remember that whole “monetary policy works on a lag” that Fed Chair JPow and your equally boring Econ 101 professor taught you? This is where that starts to come into play.
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