Q3 GDP disappointed, coming in at 2.0% versus 2.7% consensus and Q2’s 6.7%. Not to worry…bad news is good news, right? Not so fast. With inflation well above target, additional Fed stimulus is on the way out, no matter how much the economy sputters. According to the Atlanta Fed, that might be quite a lot.
Because today is a day ending in a “y,” VIX immediately fell following the news, giving bulls a little hope. But there’s no getting around the fact that the GDP slowdown, when paired with high inflation, means stagflation is right around the corner.
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