U.S. GDP slows, inflation remains persistent

U.S. real GDP grew at a 1.6 percent annual rate in first quarter 2024, the Department of Commerce reported in its advance estimate. That is a slowdown from fourth quarter 2023, when real GDP increased by 3.4 percent.

But inflation remains persistent, as the Core Personal Expenditures Price Index came in at a 3.7 percent annualized rate in first quarter.

“Inflation’s stickiness will keep the Fed cautious before making its first rate cut in July,” CBRE Americas Research said in a briefing. “CBRE expects the U.S. economy to slow this year, but [to] achieve a soft landing rather than a recession. However, restrictive monetary policy will remain a major headwind.”

Further, CBRE predicts that inflation will ease in the second quarter and that by year-end the 10-year Treasury yield will be at 4.1 percent.

CBRE is predicting a federal funds rate cut of 25 basis points (bps) in July. Oxford Economics said the firm is expecting the first rate cut in Septe