Real Vision: Finance & Investing US GDP Surprise, Japan’s Rate Hold, and PCE Signals: PALvatar Market Recap, May 1 2025
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May 1, 2025 Today's market recap dives into Japan's decision to maintain interest rates and the unexpected drop in US GDP. It highlights surprising resilience in consumer spending despite economic setbacks. The discussion also touches on mixed signals from inflation data, hinting at potential rate cuts. On a brighter note, strong earnings from big tech companies like Microsoft and Meta are boosting market sentiment, while ongoing trade talks between China and the US offer a glimmer of hope for stability.
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Japan's Rate Hold and Growth Concerns
- Japan's central bank held rates at 0.5% amid downgraded growth forecasts due to US tariffs.
- Trade policy uncertainty remains high, impacting future monetary policy considerations.
US GDP Contracts Amid Tariffs
- US GDP unexpectedly contracted by 0.3% in Q1, surprising expectations of growth.
- A surge in imports ahead of tariffs and strong consumer spending influenced these dynamics.
PCE Data Supports Fed Rate Cuts
- The Fed's preferred inflation measure, PCE, showed no monthly change for the first time in nearly a year.
- This strengthens the case for rate cuts despite concerns tariffs might reignite inflation.