This year, macroeconomic and geopolitical headwinds have fostered heightened volatility in the stock market. Fed staff economists warned that the chances of a recession in the next year had increased to almost 50% on slowing consumer spending, global economic risks, and more interest rate hikes.
However, inflation cooled more than expected in October as the Consumer Price Index (CPI) rose 7.7% from a year earlier. Therefore, a “substantial majority” of policymakers at the Fed’s meeting earlier this month agreed that it would “likely soon be appropriate” to slow the pace of rate hikes.
