Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action news and analysis.

Good afternoon, today is Thursday April 25th and I'm your host Kim Khan. Our top story so far.

Here comes the stagflation debate. The first look at Q&GDP showed economic growth

at its slowest pace in nearly two years, but the measure of inflation came in hotter than forecasts.

First, the numbers. GDP fell into an annual pace of 1.6%, the lowest level since the second quarter of 2022.

That's well shy of consensus estimates that range from around 2.3% to 2.5%, and down from

the 3.4% rate seen in Q4, 2023. The core PCE price index, which you'll know is the Fed's preferred inflation

gauge rose 3.7% for the quarter, topping expectations for 3.4% and up from 2% in the previous quarter.

Slow or anemic growth with high prices is the definition of stagflation.

And the market certainly seemed concerned about that based on their action after the print.

Stock futures sold off sharply on concerns and economic activity is much weaker than anticipated.

Bonds also sold off on the possibility that inflation figures will spook the Fed.

Early on the S&P was down about 1.5% with the NASDAQ down 1.75%, both were also feeling

a drag from Meta after its post earnings drop.

In the Treasury market, the 10 year was back above 4.7% and the 2 year was back above 5%.

But strategists aren't ready to break out the S word after just one report and say there's more of the story behind the headline figures.

Pantheon macroeconomist Ian Shepardson says quite simply,

you're going to be hearing a lot about stagflation for the rest of today.

Ignore it.

He says the down shift in growth isn't a blip, but that inflation will cool in Q2.

Defending growth, economist Ernie Taddeshi notes that the weak GDP numbers appear to be driven by weakness in volatile components, especially net exports.

Private domestic final purchases, core GDP made up of consumption and fixed investment, grew 3.1%,

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