Q1 GDP: 2.0%. Core PCE: 3.2%. The headline reads soft landing.
In Q3 1973, GDP held while the OPEC shock was already embedded. What kept it up: inventory building ahead of the disruption. The contraction came fast in Q4.
Today's private inventory investment — tariff front-running — is doing the same job. That's borrowed Q2 demand, not new demand.
The 2.0% is where the cycle peaked, not where it's floored. PCE at 3.2% means the Fed can't cut to catch what falls.
In Q3 1973, GDP held while the OPEC shock was already embedded. What kept it up: inventory building ahead of the disruption. The contraction came fast in Q4.
Today's private inventory investment — tariff front-running — is doing the same job. That's borrowed Q2 demand, not new demand.
The 2.0% is where the cycle peaked, not where it's floored. PCE at 3.2% means the Fed can't cut to catch what falls.