021 Inflation Update 07-14-23

Episode 021: Welcome to "Markets with Megan," where Megan Horneman, the Chief Investment Officer of Verdence Capital Advisors, provides insightful economic analysis. In this episode, Megan discusses the latest economic data, focusing on inflation and its impact on the Federal Reserve's interest rate decisions.

This week, the economic reports on both consumer and producer inflation revealed positive news. The inflation figures came in lower than anticipated by economists, indicating a softening of inflationary pressures at both levels. However, Megan emphasizes that these numbers do not alter the Federal Reserve's plan to hike interest rates this month.

To understand the Fed's course of action, three critical factors are under their scrutiny: wage inflation, service inflation, and housing inflation. While there are signs of improvement in all three areas, they remain elevated beyond the Fed's comfort level. As a result, Megan predicts that the Fed will likely raise interest rates one more time. The situation will continue to evolve leading up to the Fed's next meeting in September, but currently, it does not alter their trajectory, and they still have more work to do before declaring the end of the tightening cycle.

Stay informed and gain valuable insights as Megan delves into the intricacies of economic data. If you have any questions or feedback, please don't hesitate to reach out to us at podcasts@verdence.com. Thank you for joining us on this episode of "Markets with Megan."

Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors, and we are coming to you today to give you an update on some economic data we've received this week. It's been all about inflation. We received inflation on both the consumer level and the producer level. Both of these reports were good. They came in lower than anticipated by economists, so that means that inflation is softening at both of those levels. This doesn't change anything, in our opinion, from what the Federal Reserve is going to do by hiking interest rates this month.

There are three things the Fed's watching that we have to focus on it's wage inflation, service inflation and housing inflation. All three of these are showing signs of improvement, but way too elevated for the Fed's comfort level, so we think they'll still hike one more time. We'll see what goes on between now and their next meeting in September, but at this point it doesn't change their trajectory and they still have some work to do before they officially say that the tightening cycle is over. That's all I have today. If you have any questions or feedback, please feel free to reach podcast at verdence. com Thanks