The FOMC is expected to move more aggressively this week.
The FOMC meets this week with expectations they will continue the process of changing monetary policy. They are forecast to raise managed rates by 50 basis points and announce the speed and timing of shrinking their balance sheet. This easing of accommodative policy is being executed after a negative print for first quarter economic growth. The problem is the primary reason for the -1.4% Real GDP report had nothing to do with a slowing rate of consumption spending. Personal consumption expenditures (70% of GDP) grew by 2.7% for the quarter. That was faster than the 2.5% growth in the fourth quarter when Real GDP increased by 6.9%. Capital spending grew by 7.3%, up from 2.7% in the fourth quarter.
PROBANK AUSTIN ADVISOR - MAY 2, 2022