Since the beginning of the year, the major market indexes have witnessed massive volatility on concerns over aggressive interest rate hikes by the Federal Reserve to tame the multi-decade high inflation, supply disruptions arising out of the continuing Ukraine-Russia war, rising energy and commodity prices, and the possibility of a recession.
The U.S. consumer price index moderated to 8.3% in April after advancing 8.5% in March, the highest level in 40 years. Economists believe the May CPI will remain flat. The May jobs report released last week indicated that the U.S. economy had added 390,000 jobs, higher than analyst expectations of 320,000. This significantly eliminates the possibility of a pause in aggressive monetary tightening by the Federal Reserve, leading to further correction in equities.
