They Promised a Golden Age. The GDP Numbers Just Showed Up and They Are Not Golden.

Let the Record Show What Was Actually Said

I want to go on record here. When Howard Lutnick and Scott Bessent were making the rounds promising 5% and 6% GDP growth this year, I said on this program that those numbers were disconnected from reality. I caught grief for it. People emailed in saying I was talking the economy down, that these officials know more than I do.

Here is the current annualized GDP growth rate: 1.5%.

That is a C-minus. Not the promised golden age. Not 5%. Not 6%. One point five percent. I don’t say this to gloat. I say this because when people in positions of authority say things that are not backed by data, someone has to hold them accountable. That is literally what I do.

The Numbers Tell the Real Story

Forget the talking points. Here is what the actual economic data shows right now:

• GDP growth: 1.5% annualized, down from 2.1% last year and well below 2023’s 2.9%
• Monthly job creation: averaged around 92,000 this year, compared to 210,000 per month in 2023
• Real hourly wage gains: currently negative 0.3%, meaning workers are falling behind
• June PCE inflation: 3.7%, nearly double the Fed’s 2% target

You are what your record says you are. That record says we are in a slowdown with inflation that has not been tamed, which is the definition of a stagflationary environment.

Your Purchasing Power Is Being Quietly Destroyed

Here is the part that should make you angry. Real wage growth has gone negative. After years of inflation eroding purchasing power, workers were finally starting to see small real gains. Now those gains have been wiped out. You are earning more nominal dollars and buying less with them.

And based on where the inflation trajectory is pointing, you would need to roughly double your salary over the next 10 to 12 years just to hold even. That is not a typo. That is the math. The government inflation numbers, which I believe understate reality to begin with, still show 3.7% on the PCE. Your actual cost of living is probably worse.

The Bond Market Is Sounding the Alarm

People keep asking why the Fed is not cutting rates. Flip the question. Look at what the 10-year and 30-year Treasury yields are doing. Investors are refusing to buy U.S. government debt at current prices. Yields are rising because buyers want more compensation for the risk of holding dollars that keep losing value.

The bond market is doing the inflation fighting that the Fed has been reluctant to do. And what that means in plain English is:

• Borrowing costs stay high or go higher for consumers and businesses
• Mortgage rates stay elevated
• Corporate debt refinancing gets more expensive
• Government interest payments on the national debt balloon further

What You Should Be Doing Right Now

The combination of weak growth and persistent inflation is a trap for investors who are not paying attention. Here is what demands your focus:

• Do not let anyone tell you that sitting in cash or low-yield instruments is “safe” when inflation runs at 3.7%
• Understand that the official economic projections from this administration were wildly optimistic and were contradicted by basic analysis
• Recognize that negative real wage growth is a consumer spending headwind that will show up in corporate earnings
• Ask whoever manages your money what their plan is for a stagflationary environment

They told you golden age. The data delivered C-minus. Know the difference and plan accordingly.