GDP growth slows and PCE inflation is stubborn as Fed rate cut hopes dim

The odds of another Federal Reserve rate interest cut fell on Friday morning, after key reports on GDP and inflation. First, the GDP report showed that the U.S. economy slowed pretty dramatically at the end of 2025, in part because of the record-long government shutdown. On an annualized basis, GDP growth fell to 1.4% in the fourth quarter, from 4.4% in the third quarter. Economists had broadly expected fourth-quarter GDP to come in at 3%, so Friday's report landed with an unusual thud. For the full year ...