The Economy is Telling Us Something...
- Will Everett
- 5 days ago
- 3 min read
Last week we got three key data points on the U.S. economy - the latest FOMC meeting minutes, the latest GDP data, and the latest CPI data. All of which are signals for what direction our economy is headed and indicators for how we should be controlling our finances.
Here's a recap of each and my take on what this data means for consumers:
FOMC Meeting Minutes — March 17–18 (Released April 8)
The Fed held the federal funds rate steady at 3.50%–3.75%, extending the pause in rate cuts that began in January after the easing cycle of late 2025. Participants generally observed that overall inflation remained above the Committee's 2% longer-run goal, with some noting that further progress in reducing inflation had been absent in recent months.
The FOMC's projections showed GDP expected at 2.4% for 2026, with the inflation outlook revised higher to 2.7% vs. December's 2.5% projection. The median forecast remains one rate cut in 2026. Powell acknowledged the Fed had not made as much progress on inflation as it had hoped, and underscored the uncertainty surrounding the oil shock from the Iran conflict.
GDP — Q4 2025 Final Estimate (Released April 9)
Real GDP grew at just 0.5% annualized in Q4 2025 — the weakest quarterly performance of the year. The primary cause was the 43-day federal government shutdown, which the BEA estimates stripped roughly 1.16 percentage points from quarterly growth, as federal spending collapsed at a 16.6% annual rate. For context, Q3 2025 came in at 4.4% — so the drop was sharp.
The Q1 2026 advance estimate drops April 30 and will be the first real read on how the Iran war is registering in the data. Moody's Analytics currently places recession probability at 48.6%. Goldman Sachs is at 30%, EY-Parthenon at 40%, Wilmington Trust at 45%.
CPI — March 2026 (Released April 10)
The CPI rose 0.9% in March, pushing the annual rate to 3.3% — the highest since May 2024. Gasoline soared 21.2%, accounting for nearly three-quarters of the monthly increase. The silver lining: core CPI — which strips out food and energy — rose just 0.2% for the month and 2.6% annually, both slightly below forecast. Real wages fell 0.6% for the month as average hourly earnings rose just 0.2%.
What Consumers Should Do With This
Here's how to translate all three into action:
Fed holding rates at 3.5–3.75%: Borrowing is still expensive. This is not the time to take on new variable-rate debt — credit cards, HELOCs, auto loans. If you have high-interest debt, aggressive paydown beats almost any investment right now. Start with that first.
GDP at 0.5% + recession odds near 50%: Build or shore up your emergency fund now — before a slowdown, not during one. 3–6 months of expenses is the baseline. If your job has any economic sensitivity, aim for 6.
CPI at 3.3% with real wages down 0.6%: Your purchasing power shrank in March. Audit your monthly budget with energy at the top. Gas, utilities, and groceries are where the pressure is landing hardest. Trim discretionary spending before you're forced to.
The numbers are in. The Consumer Price Index rose 0.9% in March, pushing the annual inflation rate to 3.3% — the highest since May 2024. The Iran conflict was the story: gasoline soared 21.2%, accounting for nearly three-quarters of the monthly increase. The good news? Core CPI — which strips out volatile food and energy — rose just 0.2% for the month and 2.6% annually, both below forecast. Underlying inflation remains relatively contained.
What does this mean for you? Real wages fell 0.6% for the month as average hourly earnings rose just 0.2% — meaning your paycheck bought less in March than it did in February. That's the number that matters most for your Financial Health KPI.
Here's what to do with this information this week: review your monthly budget with energy costs at the top. If gas is eating into your discretionary spending, adjust now — not after another month of the same. Build a buffer. The ceasefire creates some relief on oil, but uncertainty remains.
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