Slower Growth and Inflation Concerns for the US Economy: Stay Ahead with myFT Digest

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The US economy experienced slower growth than expected in the first quarter of 2024, with an annualized rate of 1.6% compared to analysts’ predictions of a 2.5% increase. Additionally, inflation pressures were higher than expected, despite the revised rate of 3.4% for the previous quarter. Despite this disappointing growth rate, there are still concerns about bringing down inflation to the Federal Reserve’s (Fed) 2% target.

Following the data release, US stock futures declined and government bonds faced pressure. Yields on two-year US Treasuries rose, reflecting investors’ reaction to the news. This strong US economy has surprised investors, delaying expectations of interest rate cuts and strengthening the dollar while impacting global equities.

Despite the strong labor market and high levels of consumer spending in the US, concerns remain about bringing down inflation to the Fed’s 2% target. President Joe Biden hopes that a robust economy will boost his chances in the upcoming election, but borrowing costs are at a 23-year high and traders are adjusting their expectations for Fed rate cuts due to persistent inflation. Stay tuned for further updates on this unfolding story as it unfolds.

In summary, while there are concerns about bringing down inflation to meet Federal Reserve targets, there are still opportunities for growth in various sectors within the US economy. Sign up for myFT Digest today to receive exclusive updates and insights into this dynamic story.

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