The Labor Department recently reported an 8.3% year-over-year increase in Consumer Price Index (CPI) for August. As a result of the hotter-than-expected inflation report, investors expect the Federal Reserve to keep increasing rates aggressively, thereby increasing the odds of a recession and spurring market volatility.
“The problem with an aggressive Fed is that its moves could push an already slowing economy into recession. In fact, many leading indicators of economic activity have started to decelerate, making a soft landing increasingly unlikely,” a team of Charles Schwab stated.
