VTI - It's Looking More And More Like Stagflation
2024-05-06 10:47:57 ET
Summary
- Inflation levels were expected to decrease in 2024 at the start of the year, allowing for numerous potential rate cuts by the Federal Reserve throughout the year.
- That scenario has not played out so far in 2024 as inflation has become quite 'sticky'
- Higher rates are causing stress in the residential and commercial real estate markets, and both the economy, and job growth, seem to be slowing significantly.
- This makes the possibility of Stagflation more likely. We lay out that scenario and what it means for investors in the paragraphs below.
The baseline scenario for the markets at the start of 2024 was that inflation levels would continue to come down as they had been, since the CPI hit a peak of 9.1% early in the summer of 2022. This would allow Fed Chairman Jerome Powell to cut the Federal Funds rate 6–7 times by 25bps during the year....
It's Looking More And More Like Stagflation