Negative Number

While 22Q1 GDP shrank at an annualized rate of 1.4%, it fell because inventories shrank and imports skyrocketed, meaning torrid domestic consumption was met via inventory drawdowns and imports. Federal, state, and local government spending also shrank. That said, private demand grew by a sizzling 3.7%, well above the growth potential of the economy. The Fed will raise rates by 50bp next week as underlying demand remains strong, too strong.