Lemonade from A Barrel of Lemons
The May inflation report did little to ease concerns of a coming recession. Overall inflation was up 8.6% year over year, even more than the 8.3% in April. The most volatile segments of the inflation report, food and energy, were up 10% and 35%, respectively. These segments are particularly affected by the Ukrainian War. Investors are concerned that the Federal Reserve’s (Fed) interest rate increases in response to this inflation will slow the economy too much. That is, higher rates and a tighter money supply will slow demand for goods…