Market volatility is rife ahead of the central bank’s upcoming rate hike. The Fed is likely to hike rates three-quarters of a point this month. Moreover, the CBOE Volatility Index gained 40.1% year-to-date, indicative of the market turbulence. According to a Bloomberg survey of economists, the median probability of a recession over the next 12 months is 47.5%.
In addition, the personal savings rate has hit rock bottom in the United States. According to the Bureau of Economic Analysis, the personal savings rate hit 4.4% in April, the lowest since 2008, while a survey shows 58% of Americans now feel uncomfortable with the amount of emergency savings they have. This could lead to a possible decline in consumption and demand.
