The Rate-Hiking Crusade Against Inflation – Closing Bull June 24th, 2022
Quick Summary:
In this week’s Closing Bull, Jerome Powell has told Congress that the Fed’s rate-hiking crusade against inflation could cause a recession. Inflation continues to hurt the economy with our without attempts at being tamed. President Biden urges Congress to suspend Federal gas and diesel taxes for three months. The Consumer Sentiment report from Michigan University showed hope as consumers expect inflation to ease.
Let’s get into the news.
Key News This Week:
Market recap
Jerome Powell tells Congress that the crusade against inflation could cause a recession.
Inflation would continue to hurt the economy with or without being tamed.
Biden urges Congress to suspend federal gas and diesel taxes.
The Consumer Sentiment report from Michigan University shows hope as consumers expect inflation to ease.
Read the Transcript
Hi and welcome to my financial markets’ re-cap for the week.
It was a short week for the markets with Monday being a holiday in the US. Finally, we saw some light at the end of the tunnel for the market as it managed to seek out a winning week to the upside.
It’s been a crazy year so far with so much volatility. We are looking for it to recover some more in the coming days and weeks before we see some more selling.
Anyway, it was quiet for us this week, but we are expecting to grab at some of this recovery rally in the next couple of weeks.
That was the system update, what is happening in the news?
The news was pretty light this week in terms of its effect on the markets.
There was a carry-over from the Fed with Jerome Powell telling Congress that the Fed’s rate-hiking crusade against inflation could cause a recession. He said he doesn’t think the central bank will need to provoke a downturn but, said taming inflation is absolutely essential.
It’s a bit of a paradox, as taming Inflation hurts the economy by raising interest rates and reversing the quantitative easing we have gotten used to these last number of years. But then inflation also hurts the economy, so it seems the Fed can’t win.
The sweet spot would be cooling the economy without causing a recession and igniting a further market meltdown. The best news could be if prices (especially oil and gas) show significant signs of easing and there are glimmers of hope there recently as Oil has come from its high a little at least.
Speaking of energy, President Biden is urging Congress to suspend federal gas and diesel taxes for three months by borrowing $10B from the Highway Trust Fund. It could ease Pump prices but, may not have enough support. More on that perhaps next week.
The last piece of news this week was the widely-followed Consumer Sentiment report from Michigan University that came in very low but, showed some hope as consumers expect inflation to ease compared to a previous report.
That’s it from me, It’s Friday, time to down tools, thanks for watching, and bye for now.
**The risk of loss associated with trading commodity futures contracts (commodities and futures) is substantial. Therefore, you need to carefully consider whether trading in the commodity futures markets is appropriate for you in light of your personal circumstances, risk tolerance, and overall financial situation. Trading in the futures markets is highly leveraged and brings with it large potential risks even though it can bring you potential rewards. You need to fully understand the risks associated with this type of trading and derivative product and you need to ensure you ask questions about these risks. Once a decision has been made to invest after you have asked all your questions and have full knowledge of all the risks, you need to be willing and able to accept the risks in order to invest in the futures or commodities markets. If you lose your entire investment and are asked to put up more money to cover debits in your account and this will impact your personal life in financial terms, you should not be trading with money you cannot afford to lose. This communication is not solicitation or an offer to buy or sell commodity, futures or any other financial interests. You may be told that putting orders in with certain risk measures such as stop-loss or stop-limits orders will protect you. Please note that the use of any stop-loss or stop-limit orders may not limit your losses and you could lose more than your intended amount of money at risk. No representation is being made that any account will or is likely to achieve profits or losses similar to any discussed here. Past Performance of any trading or methodology is not necessarily indicative of future results. Any and all systems, forecasts, methodologies, products, options, materials, services or other communications are for informational, illustrative and educational purposes only and are not to be construed as specific advisory recommendations. We are not responsible for any trades that you may take or any losses that you may incur. Any trades that you may take are taken at your own risk. Like any investment, you should consult your broker or financial adviser before deciding to invest and when placing any trades. Any testimonials are not indicative of future performance, profit or success and may not be representative or indicative of the experiences of others or of your own experience.**