Friday, July 15, 2022
High Inflation and rising interest rates rocked markets in the second quarter. On June 10, the U.S. Bureau of Labor Statistics reported that the May consumer price index (CPI) rose by 8.6%, its steepest jump in 40 years, and an acceleration from April’s +8.3% increase. Five days after the May report, the Federal Reserve raised its discount rate – the foundation of all U.S. interest rates – by 0.75% to 1.25-1.50% – the sharpest jump since 1994. In his post-hike press conference, Fed Chairman Jerome Powell resolved to tame inflation with additional rate hikes.
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