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Jun 13, 2022

Undoubtedly, investors face a remarkably complex economic environment intensified by historically dismal market performance – four-decade high inflation, the 10-year Treasury yield rapidly climbing to levels not seen since 2011 (3.36% at close), the S&P 500 down more than 20% on the year, and perhaps most importantly, balanced account drawdowns averaging 16-17% year to date. The stress pervading markets saw little reprieve from the May CPI print which showed accelerating inflation rather than confirming a peak in prices that market participants had hoped for. On this episode, Phil breaks down the various inflation measures, explaining how core metrics can foreshadow further rising prices, but headline categories, if not contained, have the potential to damage economic growth going forward. Energy prices, particularly gasoline, are the key, and a decline in the cost of fossil fuels and related products either through naturally waning or actively suppressed demand appears requisite for prices to fall. Listen in to hear why Phil sees a strong American consumer with rising wages and low unemployment will avoid a deep recession if the economy gets there at all.