Stagflation flashing red
Wall Street is fretting over stagflation after Q4 2025 GDP was revised down to 0.7% (from 4.4%) and January PCE showed 0.3% m/m, 2.8% y/y with core PCE at 3.1% — sticky services and shelter inflation are the headline problem for the Fed x.com status on GDP revision x.com core PCE note. Bond markets are already pricing a disinflation reversal tied to energy and food shocks, leaving the Fed between cutting and tipping the economy into recession x.com bond pricing commentary.
The BEAbea.gov released the second estimate on March 13, 2026, saying the report was delayed by the October–November 2025 government shutdown and that consumer spending and investment rose while government spending and exports fell. BEA’s Personal Income and Outlays showed services spending jumped by $105.7 billion in January while goods spending fell by $24.6 billion.bea.gov Money markets have pushed back expectations for a near-term easing, with traders pricing almost no chance of a March cut.pepperstone.com The Federal Reserve’s current policy range remains 3.50%–3.75%, as tracked by market commentators.jpmorgan.com Global energy shocks have amplified market stress: crude surged toward $120 a barrel — up about 80% since the Iran conflict began — helping trigger a multi‑market bond selloff that lifted benchmark Treasury yields by more than seven basis points in a session.bloomberg.com The 10‑year Treasury yield was trading near 4.28% on March 13, 2026.tradingeconomics.com Bloomberg cited IMF managing director Kristalina Georgieva estimating a persistent 10% rise in energy costs would add roughly 0.4 percentage points to global inflation and shave up to 0.2 percentage points off growth, a dynamic markets say risks forcing central banks to stay tight.bloomberg.com Meanwhile, BEA noted real final sales to private domestic purchasers were revised down to a 1.9% increase for Q4 2025, illustrating weaker underlying demand alongside rising price pressures.bea.gov
