The U.S. economy experienced slower growth in the first quarter of 2024 compared to the previous quarter and below what economists had predicted. Despite a growth rate of 1.6% in the first quarter, this is lower than the 3.4% growth in the final quarter of 2023 and below the economist consensus forecast of 2.5%.
One key highlight of the Q1 2024 GDP was the slowdown in inflation, with the Core Personal Consumption Expenditure (PCE) price index decreasing from 3.4% in Q4 2023 to 3.7% in Q1 2023, exceeding the expected 2%. Real consumer spending growth also slowed from 3.5% to 2.5%, falling short of the expected 2.8%.
Market reactions to the GDP print included a slight increase in the U.S. dollar index and a rise in Treasury yields, with the 2-year yield reaching an unexpected high of 4.95% as traders adjusted their expectations for Fed rate cuts due to higher-than-expected inflation figures. Gold prices also went up by a significant amount, increasing by