tl:dr a recession sooner rather than in 2023 is a positive for the market. It's doing the inflation work for the Feds while rates remain manageable for continue business growth (though slower than 2020-21).
1) This print is a surprise for most economists. Feds have been hawkish because of an overheated economy. You can't say the economy is over heated when it's -1.4%. Powell might become more dovish after the May hike.
2) Everyone was predicting rate hikes to 3-3.5% to trigger a recession, slow the economy, and drop inflation. Well folks, another negative quarter and we have recession before the summer is over. Feds could see recession after raising rates by another 50-100 bps. Rates could top out at 1.5-2%. This is still extremely low historically.
3) Inflation might begin to decline with slowing global growth. Oil usage drops on lower demand. Shipping and supply chains improve with slowing demand and covid becoming endemic. Ukraine war might reach a stalemate status in late summer. Wages will stop raising because weaker consumer demand means weaker labor demand
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