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Imports Drag Down GDP
- The negative GDP growth was influenced largely by a sharp increase in imports, which subtracts from GDP.
- Import surge, especially goods, created a negative drag on GDP, illustrating the complexity behind headline figures.
Two-Year Yield Predicts Fed Moves
- The two-year Treasury yield is dropping sharply, indicating the Fed might soon cut interest rates.
- Historical patterns show the Fed follows the two-year yield closely in rate adjustments, hinting at easing soon.
Tariffs Cause Temporary GDP Distortion
- Front-running tariffs caused a surge in imports and inventory build-up, which temporarily skewed GDP results.
- This pull-forward of demand means future quarters could see inventory correction and slowed growth.