The Consumer Price Index (CPI) increased 9.1% year-over-year in June, exceeding the 8.8% Dow Jones estimate. The hotter-than-expected inflation data raises the odds of the Federal Reserve’s steep interest rate hikes. And a supersized 100 basis points rate hike is anticipated this month.
Furthermore, Goldman Sachs economists recently sliced its GDP forecast to 0.7%, down from the prior guidance of a 1.9% increase. Moreover, Wells Fargo economists expect a more aggressive Fed policy tightening, which will step up the timeline for a moderate recession starting soon and lasting a year. Overall, the odds of the economy tipping into a recession is increasing.
