The consumer price index (CPI) rose 8.5% year-over-year in July, coming in lower than the estimates. While inflation declined from the 40-year high of 9.1% in June, policymakers may not find this level comfortable. So, the Fed may continue its aggressive interest rate hikes.
Following two consecutive quarters of economic contraction, many analysts believe that we are already in a recession. So, the stock market could remain under pressure if the Fed does not ease its policy tightening. Amid this backdrop, it could be wise to add defensive stocks to one’s portfolio.
