Bloomberg Surveillance PCE Data and a Meeting with Zelenskiy
Feb 28, 2025
Frances Donald, Chief Economist at RBC, shares insights on the challenges of inflation and consumer spending trends affecting U.S. economic growth. Jordan Rochester, Head of FICC Strategy at Mizuho EMEA, discusses the strength of the USD and the implications of global economic changes. Mick Mulroy, Co-founder of the Lobo Institute, offers a nuanced perspective on military strategies in Ukraine and the importance of U.S. support amidst geopolitical tensions. Their engaging conversation highlights the complex interplay of economics, politics, and security.
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Impact of declining consumer spending
- Real consumer spending declined more than expected, impacting Q1 GDP growth forecasts.
- Economists like Neil Dutta suggest this could lead to sub-2% GDP growth.
Consumer spending and saving trends
- Consumer spending, a significant part of the economy, is typically stable but follows income growth.
- An increase in precautionary saving contrasts with concerns about rising inflation expectations.
Wealth effect and consumer spending
- The wealth effect, driven by asset prices, has influenced consumer spending.
- However, moderating home prices and shaky stock market performance may weaken this effect.