Despite a weaker-than-expected first-quarter GDP reading, the US economy is ‘firing on all cylinders’ and inflation is on a path toward a more normal level, according to the US Treasury Secretary. The Secretary mentioned that the economy is performing well and not overheated. The US economy grew by an annualized rate of 1.6% during the first quarter, the slowest pace since the second quarter of 2022. This weaker reading is not concerning, as measures of underlying growth were strong. Inflation is expected to continue to moderate throughout the year, with rents stabilizing and wage pressures not contributing to inflation. The Federal Reserve is likely to hold interest rates steady in their upcoming meeting. Geopolitical tensions remain volatile, with ongoing conflicts and an increasingly turbulent US-China relationship. There are discussions about increasing tariffs on Chinese steel and aluminum, pending the conclusion of a review.
