hursday at a better than expected 4.9%. That represents an acceleration of economic growth, at least officially, despite the Federal Reserve´s ongoing campaign to cool demand. The Fed has succeeded at crushing the bond market, freezing the housing market, and plunging many sectors of the stock market into deep downtrends. The Fed has also put the squeeze on consumers, who face higher interest rates on credit cards, car loans, and mortgages.
Of course, what is counted as stimulus today will actually become a drag on the economy in the future as interest costs on the borrowed cash pile up. The feedstock of future economic growth is capital investment, not government borrowing or consumer spending. And if you look underneath the hood of the reported 4.9% GDP growth, you’ll find that business investment actually fell for the first time in two years.
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Source: WSJ - 🏆 98. / 63 Read more »