Rate Readings

22Q4 GDP came in at 2.7%, down from 3.2% in 22Q3, primarily due to softening consumer spending, suggesting weakening. However, in January the Fed’s favorite inflation measure meaningfully rose, with December’s reading being revised upwards. Consumer spending jumped 1.8% M-o-M, the largest rise in two years, probably aided by mandated minimum wage increases, annual pay raises, and Social Security inflation-adjustments of 9%. All that said, let the rate hikes continue.