Federal data released on Friday revealed that inflation remains a persistent concern, accompanied by disappointing Gross Domestic Product (GDP) growth figures.
The numbers sparked fresh criticism of President Joe Biden‘s economic policies, particularly from Republican quarters.
Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, emphasized the need for market adjustment to the “new normal” of increased inflation in 2024.
He suggested that hopes for Federal Reserve rate cuts might need reevaluation, as repeated reductions are unlikely unless the economy faces a recession.
The U.S. Bureau of Economic Analysis disclosed that Personal Consumption Expenditure (PCE) rose by 0.3% last month, while the Consumer Price Index (CPI) reported a 0.4% increase.
Jason Furman, a Harvard economist, pointed out that inflation, excluding housing, remained significantly increased, challenging the notion that housing was the sole driver of inflationary pressures.
Concerns heightened further with GDP data indicating a sluggish 1.6% annual growth rate in the first quarter, considerably below expectations and the previous quarter’s performance.
Richard Stern of the Heritage Foundation criticized what he saw as a pattern of government growth outpacing economic expansion, attributing it to what he termed “socialism at work.”
Republicans were swift to capitalize on the economic setbacks, with U.S. Representative Elise Stefanik highlighting concerns over rising inflation, border security, and antisemitism on college campuses.
House Ways and Means Committee Chairman Jason Smith lambasted Biden’s economic policies, blaming them for escalating living costs and stunting economic growth.
