WARNING\*

The United States has just released the most concerning GDP report in many years.

Q4 GDP was announced today at 1.4%.

Expectations were 3%.

This is a significant drop from the 4.4% recorded in Q3.

And somehow, no one is talking about how dangerous this is.

And here’s what makes the situation even more frightening:

The Fed’s preferred inflation indicator, PCE, is higher than expected.

2.9% year-over-year, above the forecast of 2.8%. Monthly prices increased by 0.4% while the general forecast was 0.3%.

Core PCE? Same story. Surpassed expectations.

The economy is slowing DOWN AND prices are rising at the same time.

Quick reminder of the term: stagflation.

The last time we dealt with stagflation was in the 1970s. Paul Volcker had to raise interest rates to 20% to end it.

To put it simply, the economy is only adding about 15,000 jobs each month in 2025.

You can’t run an economy with only 15,000 jobs per month.

Now, the Federal Reserve (Fed) is completely stuck…

Cut interest rates? Inflation skyrockets.

Hold rates steady? The economy continues to slide into recession.

There’s no easy way out here.

The next few weeks will be very important. I will continue to keep you updated.