This week the Federal Reserve will meet and announce its latest move, whether it be lowering, raising, or keeping rates where they are. I am sure you have noticed the inflation, and we can be 99% certain that lower rates and unchanged rates are out the window.

Many economists and forecasters thought that in March inflation may have peaked, but they were wrong. On Friday June 10, 2022 the CPI number came in red hot, I mean RED HOT! 40 years in the making red hot. This should further tighten the Feds resolve to raise interest rates.

I have been looking at the headlines and reading the articles, and many forecasters think a 75 bps point hike is needed, and many more hikes after this months hike to tame inflation.

As much needed rate hikes are needed to tame inflation, rate hikes to not happen without a cost. Higher interest rates can send the economy into a recession. That is what the market is panicked about, that the better the jobs, wages, and economy the higher the chance of the Fed getting more aggressive.

A more aggressive Fed means higher rates, that increases the chances of a recession. Markets are right now not in a very comfortable place because normally we like to see higher jobs and wages, but right now the market views that as a reason to sell stocks. That is why you are seeing the market trade lower and why it has been volatile.