06/03/2026
This week, CEO Eric Boyce, CFA discusses key economic and market developments:
1️⃣ Economic Growth: First-quarter GDP was revised down to 1.6%, reflecting weaker residential investment and softer consumer spending. While growth has slowed, recession indicators remain relatively benign.
2️⃣ Consumer Sentiment: Confidence remains weak, especially among lower income households and particularly among measures heavily influenced by inflation expectations.
3️⃣ Inflation & the Fed: PCE inflation continues to run above the Federal Reserve's target, raising questions about the Fed’s credibility in getting back to 2% inflation.
4️⃣ Consumer Spending: Savings rates are declining, while higher-income households continue to drive spending despite overall weaker real disposable income growth.
5️⃣ Money Supply & Debt: Money supply trends could keep inflation elevated, while interest costs on federal debt have tripled over the past five years and now account for nearly 5% of GDP.
6️⃣ AI & Technology Spending: Investment in AI and technology continues to fuel economic growth, corporate earnings, and equity performance. Semiconductor companies remain a key driver, despite declining free cash flow across the broader index.
7️⃣ Equity Valuations: Stock valuations remain elevated, though high levels of short interest could provide support if markets continue to move higher.
8️⃣ Interest Rates: Rates have risen across the yield curve, with inflation pressuring short-term yields and fiscal deficits contributing to higher long-term rates.
👉 Charts of the Week: https://www.boycewealth.com/thought-leadership/charts-chat-may-31-2026
