Markets rallied on Friday, S&P 500 gained 3%, ending the week almost 7% higher as recessionary fears receded slightly. Even with the gains, the S&P 500 is still down 18% year to date.
The latest consumer inflation expectations came in lower, settling lower than the 14-year high. The survey, from the University of Michigan, said consumers expect the prices to rise by an average of 3.1 percent over the next five to 10 years. Inflation expectations are generally used to gauge consumer behaviour – rising inflation may make consumers think that prices could be higher in the future, so they will front-load their consumption and demand higher wages, thereby contributing to even higher inflation rates.
Federal Reserve Bank of St. Louis President James Bullard said fears of a recession are overblown, while Chair Powell acknowledged that it is proving to be increasingly challenging to engineer a soft landing....