- The US economy is exhibiting mixed signals; while GDP came in at 2.9%, higher than anticipated, consumer expenditure dropped to 2.1%, lower than the prediction, due to the rise in interest rates. This has sparked fears of a potential recession.
- Domestic sales rose just 0.8%, which could be due to low salaries and rising living expenses. Plus, the Bloomberg monthly survey anticipates the US economy will contract in the second and third quarters, raising the possibility of a recession by 2023 to 65%.
Why it matters
As a result of these stats, Fed may have to rethink its expected decision to hike rates by another 25 basis points next week.