A More Cautious Fed

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In his Daily Market Notes report to investors, while commenting on the Fed, Louis Navellier wrote:

Shocking GDP

The Commerce Department shocked everyone on Thursday by announcing that its preliminary estimate for U.S. GDP growth was a negative annual pace of 1.4%.  The Commerce Department cited inflation, trade imbalances, and supply chain disruptions as the catalysts behind negative GDP growth.

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Q1 2022 hedge fund letters, conferences and more

Frankly, I am shocked at the Commerce Department’s first-quarter GDP estimate and expect some upward revisions in the upcoming months.

More Cautious Fed

If the U.S. is truly in the midst of negative first-quarter GDP growth, despite corporations continuing to announce record earnings, it definitely messes with the Fed’s battle plan to raise key interest rates.  Since two quarters in a row of negative GDP growth is the definition of a recession, the Fed is now in quite a pickle, since they do not normally raise key interest rates amidst a recession.

Right now, the most immediate impact of the Commerce Department’s first-quarter GDP estimate is the hope that the Fed may now be more cautious in raising key interest rates.

The Labor Department on Thursday announced that weekly unemployment claims declined to 180,000.  Continuing unemployment claims declined just slightly to 1.408 million.  Overall, the labor market remains very healthy, since weekly unemployment claims remain at the lowest level in 52 years.

Coffee Beans

While not directly intervening in the war in Ukraine so far, countries in Europe and the United States have been contributing to the defense of Ukraine via financial, humanitarian and military aid. In absolute terms, the largest supporter as of March 27 was the United States, with a total of €7.6 billion made up of €3.2 billion in humanitarian aid and €4.4 billion in military aid. Source: Statista. See the full story here.