Capital Market Impact

Cycle Watch | August 2023 Growth on track despite headwinds

August 21, 2023
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Over the past year, inflation’s drop from over 9% to 3% was relatively easy, but getting it down to the Fed’s 2% target will be much harder and likely take longer. While inflation rose in July after months of declines, core inflation, the Fed’s preferred gauge, matched its smallest monthly increase in nearly two years. Yet any further reductions in inflation will pressure tightness in the labor market and risk triggering a recession. Still-elevated inflation threatens the possibility of the Fed pulling off the elusive “soft landing.”


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