So, the feeling that the current rise in inflation was just transitory has moved on to a feeling that it is not transitory, but still will easily moderate going forward, to a feeling that it will be around for a longer time than expected and will be more pervasive.
A little over three weeks ago, the S&P 500 dropped into “bear country”…but, just for a short period of time. The index closed the day, May 19, down 18.7 percent from its last historical high, which came on January 3, 2022.
The policy-setting committee at the Federal Reserve, the Federal Open Market Committee, has only five more meetings scheduled for the rest of 2022. These meetings come on June 14-15, July 26-27, September 20-21, November 1-2, and December 13-14.
Some analysts even see the Fed’s target range for the Federal Funds rate as high as 2.50 percent to 2.75 percent after the September meeting, up from 0.75 percent to 1.00 percent now.
Beginning in June, the Fed has signaled that it will allow $47.5 billion in securities to mature off its balance sheet, $30.0 billion in U.S. Treasury securities and $17.5 billion in mortgage-backed securities. Same for July and August.
Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
source: Seeking Alpha
