It’s okay to admit it — few expected the US economy to stay this strong after the Fed’s relentless push to raise interest rates. The US has seen records across its stock market, consumer spending, and productivity in recent months. But with rates at generational highs and inflation proving stubborn, the once-solid foundation of this strength is finally starting to show cracks.

• Yesterday, the Commerce Department announced that first-quarter gross domestic product (GDP) grew by only 1.6% — falling short of the 2.4% forecast by economists polled by WSJ.
• This unexpected slowdown stemmed from weaker household and government spending and a sluggish pace in domestic trade.

Complicating matters: In response to the news, the 10-year Treasury yield soared within earshot of 5%, marking its highest level since November — and the Dow fell over 400 points (-1%). Ordinarily, such a  report might prompt central bankers to consider cutting rates. But with inflation still running high at 3.5%, according to the latest report, the US economy is unlikely to catch a break… unless a significantly dramatic shift occurs.