The Biden economy is circling the drain.
After over a year of mismanagement, high inflation, and wasteful government spending, Bidenomics is taking its toll on the American economy.
And now, one shocking economic number suggests a crash is imminent.
The United States’ GDP has dropped by over 1% in the last quarter, signaling the start of what could possibly be a broader economic downturn and even a recession.
This figure comes after the Federal Reserve has spent the better part of two years working to do whatever it can to try and prop up both the housing and stock markets from any sort of declines.
And yet after near-zero interest rates for years, combined with trillions of dollars in brand new money printing, the Federal Reserve’s schemes are beginning to come undone.
CNBC reports, “Gross domestic product unexpectedly declined at a 1.4% annualized pace in the first quarter, marking an abrupt reversal for an economy coming off its best performance since 1984, the Commerce Department reported Thursday.
The negative growth rate missed even the subdued Dow Jones estimate of a 1% gain for the quarter, but the initial estimate for Q1 was the worst since the pandemic-induced recession in 2020. GDP measures the output of goods and services in the U.S. for the three-month period.”
This is devastating news.
Combined with a huge downturn in the markets, which experienced their worst single month performance since the beginning of the Great Recession in October 2008, the latest GDP numbers suggest that the US economy is beginning to come undone.
What’s incredible about this statistic is that GDP numbers are also partially driven by government spending.
And with government revenues and expenditures both at record highs, the fact that the GDP shrank last quarter is a damning indictment of Congress, the White House, and the Federal Reserve alike.
And now, the Federal Reserve’s support legs are being taken out from underneath the markets as Fed Chairman Jerome Powell works desperately to bring inflation under control.
“Current market pricing indicates the equivalent of 10 quarter-percentage point interest rate moves that would take the Fed’s benchmark interest rate to about 2.75% by the end of the year. That comes after two years of near-zero rates aimed at allowing a recovery from the steepest recession in U.S. history,” adds CNBC.
“Along with that, the Fed has halted its monthly bond-buying program aimed at keeping rates low and money flowing through the economy. The Fed will start shrinking its current bond holdings as soon as next month, slowly at first then ultimately at a pace expected to hit as high as $95 billion a month.”
These numbers suggest that even after trillions of new government spending and cheap credit, the “everything bubble” that was created by the Federal Reserve in the aftermath of the Great Depression cannot stay afloat much longer.
It remains unclear what the ultimate bottom is for the markets. Stocks have taken a plunge this past month, while growth in the housing market is now beginning to follow.