Let’s Talk… Inflation and the Banking Crisis!
I wanted to wait to see what the recent Consumer Price Index readings were on Wednesday before writing this blog. The widely looked at inflation stat came in at .1 % for March and 5 % from a year ago. Here is what I take from these numbers.
First the Fed’s rate hikes are taking hold and doing their job. You can expect rates to continue to rise but at a far slower pace.
Second, the rate hikes seemed to tame inflation but ended up causing a banking meltdown. I don’t think they want another banking crisis, so rates have a limited upside.
Third, one month’s inflation stat isn’t a trend, but it’s a good number for people who watch the market.
Fourth, the Fed expects the banking problems that we’ve had a few weeks ago to continue. It’s not over and they expect it to put the US economy in a recession in the later half of the year.
Lastly, rates aren’t at zero so the Fed has some tools at their disposal to stimulate the economy if needed down the road.
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The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
