What we’re reading (7/12)
“Inflation Rose Just 0.2% In June, Less Than Expected As Consumers Get A Break From Price Increases” (CNBC). “Inflation fell to its lowest annual rate in more than two years during June, the product both of some deceleration in costs and easy comparisons against a time when price increases were running at a more than 40-year high. The consumer price index, which measures inflation, increased 3% from a year ago, which is the lowest level since March 2021. On a monthly basis, the index, which measures a broad swath of prices for goods and services, rose 0.2%.”
“US Stocks Climb As Traders Hope Cooler June Inflation Means End To Fed Tightening” (Insider). “Stocks climbed on Wednesday as traders hoped that cooling inflation will put an end to the Federal Reserve's rate hikes soon…Investors are still widely expecting the Fed to hike rates 25 basis points at its July policy meeting, which would lift the fed funds rate target to 5.25%-5.5%. Another rate hike remains on the table, but bets that the Fed will pause in September rose to 82% from 72% on Tuesday.”
“Wall Street’s Recession Warning Is Flashing. Some Wonder If It’s Wrong.” (New York Times). “The yield curve…has continued to reverberate in 2023 and is now sending its strongest warning since the early 1980s of a coming downturn. But even though the alarms have been getting louder, the stock market has rallied and the economy has remained resilient, prompting some analysts and investors to rethink its predictive power.”
“Q And A With Robert McCauley On Manias, Panics, And Crashes: A History Of Financial Crises” (London School of Economics). “There is no place in standard economic reasoning for manias. Ben Bernanke discounted [Charles] Kindleberger’s views as depending on human irrationality, but Kindleberger made it very clear that individual rationality can lead to collectively irrational results.”
“U.S. Takes Third Shot At Shoring Up Money-Market Funds” (Wall Street Journal). “The Securities and Exchange Commission voted 3-2 Wednesday to change the rules governing money-market funds, which the Federal Reserve had to backstop with emergency lending facilities in 2008 and 2020. Two previous overhauls by the SEC failed to stop investors from fleeing certain funds en masse when markets faced extreme stress.”
