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They began talking about raising rates much earlier. Markets and the economy are forward looking.
by recursivedoubts 5y ago
They began talking about raising rates much earlier. Markets and the economy are forward looking.
- VHRanger 5y agoMarkets didn't react until around Feb 2022. Look at mortgage rates for instance. Or just equities indeces.
- kasey_junk 5y agoAll of the predictions ahead of this number and the article itself were predicting this based on inventory surpluses that had been built up in the previous 2 quarters. That seems a more directly attributable cause than fears of interest rate increases. In fact, if you anticipate interest rate increases it makes more sense to bring spending forward not to delay it.
- jlmorton 5y agoI'm not sure what you're suggesting. What was the mechanism by which talk of higher rates reduced GDP? Consumer and business spending both increased. Personal consumption expenditures increased at 2.7%, and business investment increased at 2.1%. The big drag in the report is from inventories and trade, which are being impacted by pandemic-related supply chain issues and geopolitics.