While hopes of a sharp decline in inflation helped the market make a good start to the year, a sharper-than-expected decline in retail sales during the holiday month and a third consecutive month of decline in industrial activity have been an unpleasant reminder about the double-edged nature of interest rate hikes.
This week’s earnings releases and updates on the S&P Case-Shiller Home Price Index, new home sales, durable goods orders, and consumer sentiment could indicate an interest-rate-driven economic slowdown and reinforce the expectation for a recession in the U.S.
