Inflation’s impact on the stock market
Stocks can generally act as a buffer against the long-term impacts of inflation.
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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