Overview

We touch on several bases today, starting with last Friday’s initial estimate of 1Q GDP, which was lower than the pace of growth in the 4Q but above the pre-report consensus. From there, we look at private-sector wages which rose by the most in 11 years in the 1Q – a nice surprise.

The Fed’s monetary policy committee is meeting today and tomorrow, and the question is whether there will be two or three more interest rate hikes this year. I’ll give you my thoughts. Next, we’ll take a look at the flattening yield curve and whether or not we should be worried about it.

And finally, I’ll share the most interesting political article I have read recently. Let’s jump in.

GDP Growth Slowed in 1Q, But Beat Expectations

The US economy slowed in the 1Q as consumer spending grew at its weakest pace in nearly five years. Gross Domestic Product increased at a 2.3% annual rate, the Commerce Department reported Friday in its initial estimate of 1Q GDP. Growth was also held back by a moderation in business spending on equipment and investment in homebuilding.

Despite that, the advance estimate of 2.3% was actually better than the pre-report consensus of 2.0%, but it was below the 2.9% GDP growth in the 4Q of last year. The 1Q GDP estimate tends to come in on the low side due to seasonal adjustments, but at least it was better than the 1.2% reading in 1Q 2017 and 0.6% in 1Q 2016.

Real GDP