Break-even math: How much gain is needed to recover from a loss fully?
Investors may undervalue the impact of investment losses and don’t know that more significant gains are needed to recover fully.
Inflation spiked again for May and measures of inflation expectations rose as prices continued to rise sharply across a broadening portion of the economy. The Fed is committed to getting inflation under control, announcing a sharp 75 basis point rate hike at the June FOMC meeting with a similar increase likely in July, too. Can the Fed successfully bring inflation back within bounds without sending the economy into a recession in coming years? That is the big question driving the volatility in interest rates and equity markets.
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