The consumer price index (CPI) rose 8.3% year-over-year in August, beating economists’ estimates. The stubborn inflation is expected to spur the Fed to keep increasing interest rates aggressively, potentially triggering a recession.
With inflation hovering near multi-decade high levels and the job market remaining tight, the Fed has been increasing interest rates aggressively this year to bring down the prices. While the rising rate environment has affected most sectors, it helped financial companies expand their revenues, which are positively correlated with interest rates.
