No one's on the same page about the economy

Americans, the White House, and the Fed all say wildly different things

Hello investors! If you’re new here, add your email below to get every edition of Opening Bell Daily in your inbox, free.

To no surprise, Nvidia crushed first-quarter earnings.

You’ll likely read about it in every other financial newsletter published today — which is why I want to instead focus on the widespread economic confusion sweeping the US economy and markets.

We have enough surveys, comments, and data to know one thing for certain: Nobody’s on the same page.

Today’s letter is brought to you by iTrust Capital

Bitcoin has been one of the best-performing assets of the last decade. Yet if you turn to a traditional exchange, you have to pay taxes.

iTrust Capital offers tax-advantaged accounts so you can save money on taxes while still investing in crypto. Long-term investors understand the power of an IRA.

The consensus is that there is no consensus

How strong is the US economy?

Depends who you ask.

President Biden will tell you inflation is cooling faster than an ice cream cone in summer, and Bidenomics have worked great. 

Fed Chair Jerome Powell will tell you inflation is actually too high, though the economy has proved more resilient than expected. 

As it turns out, everyday Americans are experiencing something else entirely. 

According to a new Harris poll:

  • 55% believe the economy is shrinking

  • 56% believe the economy is in a recession

  • 72% believe inflation is getting worse

“What Americans are saying in this data is: ‘Economists may say things are getting better, but we’re not feeling it where I live,’” said John Gerzema, CEO of the Harris Poll. 

If we take government data at face value, those perceptions don’t quite align with reality. 

US GDP is still positive and robust.

April CPI fell from 3.5% to 3.4% compared to the prior month. 

Source: Morningstar

But parsing the numbers misses the point.

Indeed, if consumers say everything feels expensive, policymakers are the only ones who benefit from stepping in and correcting them. 

Notable, too, is how pessimism has colored other surveys this month. 

The University of Michigan’s report showed consumer sentiment tanked 13% in May compared to April, hitting its lowest in six months.

Meanwhile, a Financial Times poll showed the majority of consumers disapprove of how Biden is handling the economy, particularly when discussing prices for food and gas.

These are not favorable for a president seeking reelection, and the administration knows it.

So, the White House published a memo this week that blamed Republicans for blocking its initiatives, and said that combating inflation remains a priority.

"Economists warn that MAGAnomics would set off an 'Inflation bomb,’” wrote deputy press secretary Andrew Bates. 

Biden himself has tried to communicate as much.

In more than one interview this month, he has claimed, incorrectly, CPI hovered at 9% when he entered office and — presumably thanks to his policies — it’s since fallen to 3%. 

CPI was 1.4% when his term began.

As for Powell, he may be the person who has the most even-handed grasp on the economy. It is his job, after all.  

But central bankers have reiterated plenty that they won’t lower interest rates until they see more evidence inflation is cooling.

And according to FOMC minutes released Wednesday, no one at the Fed is sure how long that might take. 

With all the mixed messaging, it’s no wonder Americans are experiencing an economy seemingly so untethered from the data.

Then again, are the surveys really so far removed from reality?

Here’s what Arie Kotler, the CEO of Arko, which operates thousands of convenience stores and gas stations across the US, told Reuters on Tuesday:

“You not only have inflation pressure now but also higher interest rates and fuel prices at $3.59 on average nationally. People are going to drive less and spend less as they have less money in their pockets.”

*At a glance:

*Data as of Wednesday 8 p.m. ET


  • Nvidia delivered another knock-out earnings report. The chipmaker over-delivered on revenue and EPS, and it also announced a 10-for-1 stock split. Compared to a year ago, revenue is up 262%. The stock soared after hours. (Yahoo Finance)

  • BuzzFeed stock soared 20% Wednesday after former presidential candidate Vivek Ramaswamy took an activist 7.7% stake in the company. Shares had climbed as much as 82% before pulling back at the close. (CNN)

  • Goldman Sachs’ CEO sees zero rate cuts this year. David Solomon said the data don’t support easing Fed policy. He said the risk of an economic slowdown is “real and palpable.” (Bloomberg)


  • Newscorp stock jumped after it announced a multi-year deal with OpenAI to use its journalism in ChatGPT (Fox Business)

  • US lawmakers have passed a crypto market structure bill (CoinDesk)

  • Target stock declined 8% as weak shopping trends drag earnings (CNBC)

  • US home sales dropped for the second month in a row (Reuters)

  • Citi has to pay a $78 million fine after a trader in London made a fat-finger mistake that caused a flash crash in European stocks (Business Insider)

  • Mark Zuckerberg created an AI advising council with high-profile, unpaid members from Stripe, Shopify, and elsewhere (Bloomberg)

Last thing:

Interested in advertising in Opening Bell Daily? Email [email protected]