U.S. economy in a 'multi-dimensional' supply shock environment, says EY Parthenon's Chief Economist

• US growth is anticipated to decelerate to around 1.5% by year-end, with inflation rising towards 4% and ending the year around 3%.
• Consumers are increasingly dipping into savings and using credit, as real disposable income growth lags behind consumer spending.
• The Fed is expected to hold rates due to persistent inflation, with geopolitical conflicts and fiscal sustainability concerns pushing long-term yields higher, eroding growth momentum.

EY-Parthenon's Chief Economist, Gregory Daco, discusses the U.S. economy's 'multi-dimensional shock environment,' anticipating decelerating growth and sticky inflation. He suggests a 'stagflationary' outlook with consumers 'running on fumes' and the Fed likely to hold rates due to inflationary pressures, despite geopolitical conflicts.