Inflation: GDP print showed reasons for concern, Harvard economics professor says

12,530

134 0

Published 2024-04-25

The United States GDP (gross domestic profit) grew by only 1.6% in the first quarter, the smallest increase in over two years. The Federal Reserve has seemingly elected to wait for more inflation data and keep interest rates where they are as inflation continues to be hard to nail down. Wall Street experts have gone back and forth over when the Fed will cut rates, if it will even cut rates in 2024, and the slim chance of rates being pushed higher.
Harvard University's Kennedy School of Government Professor Jason Furman joins Yahoo Finance to discuss the health of the economy and his theory on how — or if — the Fed will follow through with rate cuts this year.
"The big surprise here was that at an annual rate in the first quarter, core PCE inflation — which is basically what the Fed is looking at — was a 3.7% annual rate. As recently as two months ago, that was expected to be 2.1%. Forecasters thought, mission accomplished," Furman, who was the Council of Economic Advisors Chair during the Obama Administration, assesses. "Instead, we now have a red flashing warning sign. The Fed will not be able to be reassured enough about inflation to cut rates any time this year... The only thing that's going to get us Fed rate cuts any time soon is a much more rapid deterioration in the job market than I expect to get or hope to get, but that's the contingency under which the Fed cuts rates before December. "
About Yahoo Finance:

Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, advanced tools, and more information to help you manage your financial life.

- Get the latest news and data at finance.yahoo.com

- Download the Yahoo Finance app on Apple (apple.co/3Rten0R) or Android (bit.ly/3t8UnXO)

- Follow Yahoo Finance on social:

X: twitter.com/YahooFinance
Instagram: www.instagram.com/yahoofinance/?hl=en
TikTok: www.tiktok.com/@yahoofinance?lang=en
Facebook: www.facebook.com/yahoofinance/
LinkedIn: www.linkedin.com/company/yahoo-finance

All Comments (9)

@thehonesttruth8808 2 months ago

Stagflation is here
@nickvin7447 2 months ago

Stagflation
@24theMoney 2 months ago

But But But AI...NVDA....LOL
@almdrs 2 months ago

Hang in there, folks! You know you can always count on Democrats and Republicans to work to together to send money to... other countries.
@AwakenedFromWoke 21 days ago

Numbers look good on a computer, but the value doesn’t go as far. There’s no economic growth, else wages would have increased. And they haven’t.
@mbrum3230 2 months ago

We need massive layoffs. Start with those making 20 per hour for min wage work.
@xiphoid2011 2 months ago

Americans spend more money eating at restaurants than on groceries, all the while complaining about inflation. Hey guys, if you are just going to borrow more to keep buying the same amount of good, inflation will NEVER come down. The logical thing is to refuse to pay the higher price, buy and spend less, that's how you bring down the inflation. But hey, Americans have always been known to spend irresponsibly and don't even save for their own retirement, so why change now?
@joealonzo536 2 months ago

The key to knowing the state of the economy. Question: Can I afford in the Biden administration what I could afford in the last administration? And the answer is: NO, you cannot. Question: Is the 125% price increase of everything I need to buy and pay equal to the 17% salary increase I got; the answer is: NO, it is not. Question Analysis: Is the Biden administration taking money from doctors, school principals, Engineers, factory workers and transferring that money to the Billionaires “by ways of price increase”. The answer is YES.