Glass Half Empty or Half Full?

The market is in two minds about the state of the US economy after its 0.9% contraction (0.2% after adjusting for inflation) in the second quarter. This decline in gross domestic product (GDP) follows a 1.6% fall (or an inflation-adjusted 0.4%) in the first quarter. For some, two consecutive quarters of negative growth means that the US economy is now in a technical recession. Others disagree, pointing to a robust July job report, the healthy level of household savings, and continued wage growth.

The Fed announced another 75 basis point (bps) rate hike in late July as inflation remained elevated, pressured by continued supply and demand imbalances. While core PCE (personal consumption expenditures) inflation — the preferred measure of inflation by the Fed — seems to have peaked, it is still above the Fed’s target of 2%.

Amid recession fears, markets

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