Though the stock has rebounded somewhat after last week’s sell-off, the rally could be just a minor relief in the continuous sell-off. Last week, the Dow hit its first eight-week losing streak, while the S&P 500 fell briefly into a bear market on an intraday basis. The Nasdaq is down 20% or more from its prior high, while the S&P 500 and the Dow are 10% or more down from their prior highs.
Meanwhile, the Federal Reserve’s hawkish tilt to tame the 40-year high inflation is lifting short-term borrowing costs significantly. Kansas City Federal Reserve Bank President Esther George expects the Fed to raise the target interest rate to about 2% by August, depending upon how the forces of demand and supply affect the current inflationary situation.
