The impact of these past seven days will reverberate for the next several weeks around the abandoned halls of Wall Street and Washington DC as politicos and investors retreat to the Hamptons or Martha’s Vineyard or wherever they summer. Are we in a recession? It’s hard to say, but hopefully by September the knowledge we gleaned during this treacherous week will be fully absorbed, and our understanding of the US economy will be more clear.
So what are we working with here? Let’s recap.
- The Federal Reserve raised interest rates by another 75 basis points. The market expected this move but it was still a historically large hike. The Fed’s actions increased the rate that banks charge each other for overnight borrowing to a range of between 2.25% and 2.50%, the highest since December 2018.
- Key inflation gauges showed prices remain elevated. The personal consumption expenditures price index rose 6.8% in June — that’s the biggest…
