Latest / The Macro Memo with Fexingo: Daily Conversations on Inflation, GDP, and Federal Reserve Policy
The Two Percent GDP Trap That Has the Fed Stuck
Lucas and Luna dig into the latest GDP and CPI data to understand why the Fed is stuck at 3.65 percent interest rates even as inflation stays above target. With real GDP growth at an annualized 2.00 percent, consumer sentiment hitting record lows, and the ten-year breakeven inflation rate at 2.40, the hosts explore whether the economy is in a 'goldilocks' scenario or a stagflation-lite trap. Lucas uses the specific case of the 10-year Treasury yield dropping to 4.56 percent while short-term rates stay elevated to explain the 'bear steepener' that bond markets are pricing…
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