The 1.4% Wake-Up Call, A Hormuz Countdown, and AI’s New Victims

Dear readers,

On Wednesday, we examined the $1,300 invoice tariffs are slipping onto American kitchen tables. Today, a different bill arrived—this one addressed to the soft-landing faithful.

The Bureau of Economic Analysis delivered fourth-quarter GDP growth of just 1.4%, annualized. Economists had penciled in 3.0%. The gap between expectation and reality is the kind of chasm that makes portfolio managers reach for their antacids on a Friday afternoon.

Compounding the discomfort: the Fed’s preferred inflation gauge, the PCE price index, ticked up to 3.0% in December. Growth halving while prices remain sticky isn’t a data point—it’s a stagflationary whisper. And whispers have a way of becoming shouts.