'Stagflationary' GDP Data Sparks Market Turmoil, Rate-Cut Hopes Crushed

Weaker than expected growth and hotter than expected prices... the perfect example of a central banker's nemesis: Stagflation...

...and the market is very unhappy about it.

Olu Sonola, head of US economic research for Fitch Ratings:

“The hot inflation print is the real story in this report.

If growth continues to slowly decelerate, but inflation strongly takes off again in the wrong direction, the expectation of a Fed interest rate cut in 2024 is starting to look increasingly more out of reach.”

Rate-cut expectations have dropped back near cycle lows (for 2024 and 2025)...

Source: Bloomberg

Treasury yields are soaring, led by the short-end...

Source: Bloomberg

With 2Y back above 5.00% (will it hold)...

Source: Bloomberg

Stocks are getting spanked...

Commodities are less anxious with oil sliding a little, gold rallying modestly even with the dollar rising...

Source: Bloomberg

Crypto is heading lower...

Source: Bloomberg

What time is the Biden press conference to confirm there will be rate-cuts this year?