Two days ago, we discussed how the Dow Jones was expecting yesterday’s inflation number to come in at 8.7%, down 0.4% from June. Yesterday, we saw the reality of the situation, which was that prices were flat across the board when looking at the Bureau of Labor Statistics CPI. This was a major milestone, as it marked the first time the aggregate measure hadn’t posted a month-over-month increase since May 2020. Even with the CPI metric evening out, other metrics like the average price for a used car are still up 10.5% year-over-year.
Some professional economists like Aneta Markowska from Jefferies have said that given this data as well as the way things are shaping up “The whole recession narrative really needs to be put on a shelf for now” and that “I think it’s going to be shifting to a stronger-for-longer narrative, which is really supported by a reversal in inflation”. On the other hand, some investors like ARK’s Cathie Woods have already declared the recession as something we are in right now. Across the board, there seems to be some agreement that a recession has started, will start, or will start sometime in the short to medium term future.
With all these differing opinions, what do you think?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.