Know The Difference Minute

Higher interest rates weigh on stock prices. It’s a backdoor way of reducing people’s income via the Wealth Effect.

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Welcome to the Know the Difference Minute for Thursday, June 9th.
The Federal Reserve is indeed serious about fighting inflation—maybe perhaps more serious than investors give it credit for. It’s an unenviable task and market watchers are white knuckling it hoping it can engineer a soft landing.
The central bank hasn’t had to deal with inflation like this in decades. May’s consumer price index is due tomorrow morning, and it’s expected to increase by 0.7% from April, good for an 8.2% increase from a year earlier. Still high but a slight deceleration from the current 8.3%.
Fed watchers expect rate hikes in the next 3 meetings starting next Wednesday. Face it, higher interest rates weigh on stock prices. It’s a backdoor way of reducing people’s income via the Wealth Effect. People might think twice about splurging if their portfolios are down.
I’m Dave Spano from Annex Wealth Management. That is your Know the Difference Minute.