The 8.2% year-over-year increase in September’s Consumer Price Index (CPI) has raised fears of the Fed responding with a fourth consecutive 75-bps rate hike in its November meeting. Major market indices have declined significantly due to recent macroeconomic headwinds. The S&P 500 has lost more than 20% year-to-date, while the Nasdaq Composite fell more than 30% over the same period.
Many economists believe the economy will soon slip into a recession as the central bank continues to stay committed to its hawkish stance. The probability of an economic downturn over the next 12 months stands at 60%, with economists expecting the labor market and demand to become casualties in the Fed’s inflation battle.
