Since the beginning of the year, the stock market has witnessed intense selling pressure due to several macroeconomic and geopolitical factors. The major market indexes, which have been under pressure, witnessed another round of intense selling pressure over the past few days after the release of the inflation data for May on June 10. The consumer price index rose 8.6% in May, marking its highest increase since December 1981.
In its efforts to tame the multi-decade high inflation, the Federal Reserve has adopted a hawkish stance by hiking interest rates twice this year. With the consumer price index rising above the analyst estimates of 8.3% for May, the Federal Reserve is expected to hike interest rates by 75 basis points, with more coming in later this year. The rising interest rate environment is usually favorable for many companies in the financial sector, especially banks. Higher interest rates help banks increase their revenues.
