GDP data underlines a loss of momentum of the US economy but also shows that inflation picked up more than predicted. “The report also underlines the loss of momentum that the US economy has experienced over the past year. 2Q15 GDP growth of 3.9% followed by 2.0% in 3Q, 1.4% in 4Q and now this 0.5% in 1Q16, is not an encouraging trend, while the outlook for 2Q16 isn’t particularly great given business survey readings.” “Nonetheless, inflation picked up more than predicted with the core PCE deflator rising to 2.1%, which is pretty much in line with the Fed's ”longer-run objective”. Looking at these two outcomes together, the report doesn't really give us a clear guide as to whether the Fed is more likely to hike at June.” “We think we will need to see a decent bounce in the activity data for a June hike to occur. We still favour a September move with the Fed then waiting until 2017 before hiking again.