Inflation Fears Grip Tighter

April 25, 2022

Inflation Fears Grip Tighter Photo

Risk markets fell sharply last week after Federal Reserve (Fed) Chair Powell acknowledged more aggressive rate hikes would be needed to bring down surging inflation. A 50-basis-point rate hike is nearly set in stone for the upcoming Fed meeting in May and the bond market is pricing in higher odds of a 75-basis-point hike at the June meeting.

Global news dominated headlines over the weekend, with the Macron victory in the French presidential election quickly overshadowed by news that Beijing will be initiating lockdowns as coronavirus cases in China continue to rise. The new lockdowns are certain to dampen the global growth outlook and create new supply chain disruptions.    

This week’s economic calendar is highlighted by Thursday’s release of first quarter gross domestic product, which is projected to come in near 1%. We will also get new inflation data, with quarterly and monthly personal consumption expenditures coming out Thursday and Friday, respectively. Earnings announcements for large-cap technology companies this week — including Meta, Apple, Alphabet and Amazon — will take on even more significance in light of the recent market volatility.

Tags: Inflation | FOMC | Risk Markets | GDP | Earnings | PCE

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