The latest quarterly GDP, January through March, shows the US economy grew at a 2 percent annual rate driven by consumers spending at the fastest pace in nearly two years. Real personal income rose 2.4 percent quarter-over-quarter on an annual basis. Exports grew 3.5 times faster than imports. These are some highlights of a report by DICK BOVE comparing and contrasting the upsides and downsides of the government's latest GDP numbers.

On the downside, he notes that growth in personal income is substantially offset by a surge in government transfer payments during the quarter. A massive proportion of spending is also directed at debt service payments. The bull case depends on continued momentum from consumers; the bear case argues this can't continue, according to BOVE, chief financial strategist at ODEON CAPITAL GROUP. US consumers are spending generously despite rising borrowing costs, a potential sign of lingering post-Covid feel-good optimism, according to MAT VAN ALSTYNE, ODEON co-founder and managing partner.

Meanwhile, BOVE is out with a scathing critique of the Federal Reserve, "The Last Straw. Is the Federal Reserve Deliberately Publishing Questionable Data?" BOVE notes, for example, that despite the latest bank stress test indicating US banks are in sound condition, the likelihood of more interest rate rises, "will intensify the problem that caused the recent bank failures." Joining the CONVERSATION is out host, JOHN AIDAN BYRNE.

Questions & Comments: [email protected]