U.S. Economy Shows Unexpected Resilience, Sparking Optimism and Potential Fed Pivot
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U.S. GDP growth of 3.3% in the last quarter exceeded expectations and sparked optimism about avoiding a recession. Consumer spending drove much of the growth.
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Inflation rose 1.9% excluding food and energy costs, aligning with the Fed's target rate. This "soft landing" scenario is positive.
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Positive signs like record stock market highs and strong December job growth reinforce the upbeat GDP data.
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Consumer confidence surged 13% in January to its highest since July 2021, contrasting earlier frustration.
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The Fed may now delay interest rate cuts to control inflation, given the economy's unexpected resilience to existing rate hikes. First cut could be in May.