US economy slouches toward recession

• Atlanta Fed GDPNow second quarter estimate sinks to 0.9%.
• GDP contracted 1.5% in Q1, two consecutive quarters is the traditional recession definition.
• Fed determined to add 100 basis points to the base rate before a potential slowdown.

Federal Reserve governors don’t need another reason to raise interest rates but declining US economic growth is adding a note of urgency to inflation’s inescapable logic. Hike rates before the public outcry from a recession brings policy to a shuddering halt.   

Inflation’s threat is plain. Annual consumer prices rocketed 8.3% in April, core prices rose 6.2%. Personal Consumption Expenditures (PCE) prices, the central bank’s preferred gauge, were up 6.3% and core expenses rose 4.9%. 

CPI

FXStreet

Despite the slight decline in April’s consumer price averages, factories paid ever higher costs for their materials that month. The Producer Price Index (PPI), jumped 11% and the core…

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