Highest CPI Inflation Print since 1981
Well, today’s CPI number came in above consensus expectations at 9.1% year over year. The core underlying numbers were strong as well. Keep in mind that the numbers being reported are from several weeks ago. Since around the first of July, we have seen several data points that reflect a much softer housing/rental market, and commodity prices are down across the board. The bond market has already done a lot of the Fed’s job for them. That can be seen today in higher mortgage rates versus where they were last year at this time. As we look forward into 2023 the market is forecasting that the Federal Reserve will lower interest rates because of their policy error now.
We remain optimistic that we will have a rebound in the stock market during the second half of 2022. The news, however you get it, remains extremely pessimistic. Growth stocks have been holding up well over the past two weeks. Market bottoms form when the worst has been discounted meaning the news is still dire. Think back to 2008-2009 the world was ending from December to March. The market bottomed on March 9th, 2009, and never looked back however, the news was doom and gloom for the next six months. We are more than likely to see the same thing happen this time around. Why? Because human behavior has never changed and never will. Better times ahead.
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