U.S. economy grew 2% from January to March, recovering from federal shutdown
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- Commerce Department reported Q1 GDP growth of 2%, up from 0.5% in Q4 2025, with federal spending and investment expanding at a 9.3% annual rate.
- Federal Reserve kept its benchmark interest rate unchanged, citing “a high level of uncertainty” from Iran’s blockade of the Strait of Hormuz.
- Carl Weinberg of High Frequency Economics said no defensible forecast can be made for Q1 GDP because the blockade is unprecedented.
- Trump’s war with Iran has shut the Strait of Hormuz, a route for about 20% of global oil and LNG, pushing energy prices higher.
- Business investment rose 8.7% in Q1, driven largely by AI spending, while consumer spending slowed to 1.6% from 1.9% at the end of 2025.
Why it matters: American consumers face higher energy costs as Iran's blockade pushes oil prices up, eroding disposable income while AI‑focused firms see a surge in investment, fueling sector growth.
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