After months of relatively strong economic data for President Donald Trump, the Bureau of Economic Analysis delivered a stunning bout of bad news across the board. Contrary to expectations that the economy would slightly grow during the first quarter of the year, the Commerce Department‘s preliminary estimate found that our GDP actually shrank by 0.3% at an annualized rate in major part due to widespread uncertainty over the White House’s trade war.

And the personal consumption expenditures price index, a preferred inflation gauge for the Federal Reserve, rose by an annual rate of 3.6% in the first quarter of the year. That’s nearly twice the central bank’s maximum inflation target of 2% and a sharp increase from the 2.4% PCE inflation rate of the last quarter of 2024.