Know The Difference Minute

With inflation running rampant and a probable dud of a GDP report inbound, speculation about a 1% interest rate hike grew daily. Turns out, it wasn’t going to happen.

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Welcome to the Know the Difference Minute for Wednesday, July 27th.
In search of the proverbial soft landing for the economy, the ideal scenario sees higher borrowing costs lowering inflation while also avoiding squeezing employers into laying off employees.
But with inflation running rampant and a probable dud of a GDP report inbound, speculation about a 1% interest rate hike grew daily. Turns out, it wasn’t going to happen. Instead, the Fed announced a 75-basis point jump. That brings rates to a range of 2.25%-2.5%, or a neutral level—the highest since December 2018.
We’ve seen 4 increases and it’s highly likely we’ll see more. The Fed has stated they remain committed to returning inflation to its 2% objective.
Quite a gap between current conditions and 2%. The prospect of a soft landing gets a little more distant each day.
I’m Dave Spano from Annex Wealth Management. That is your Know the Difference Minute.