Drunk Real Estate 96. GDP Down, Rate Cuts Delayed & CRE on Ice – What’s the Fed Waiting For?
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May 8, 2025 Dive into the surprising drop in GDP and ponder why the Fed is hesitating on rate cuts. Discover the state of the commercial real estate market and the looming risks of rising debt. The hosts mix humor with insight, discussing trade shifts and economic forecasts while sipping their favorite drinks. There’s even a whimsical debate about men versus gorillas, ensuring a lighthearted touch amidst the serious economic discussions. Get ready for an entertaining take on current market dynamics!
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Imports Distort GDP Measurement
- Large imports can initially depress GDP, but eventually the imported goods offset this by increasing business inventory, consumer spending, or government spending.
- The Q1 GDP negative reading may be revised upward as data on imports and inventory become clearer.
Fed's Tough Dual Mandate
- The Fed's dual mandate is to maintain full employment and stable prices, but achieving both simultaneously is difficult.
- Recent job data is positive but subject to revision, influencing the Fed's patience on rate changes.
Inflation Cooling Supports Fed Pause
- March inflation showed near zero increase, indicating inflation is cooling.
- This data supports the Fed's current hold on interest rates with no immediate need to raise or cut.