Inflation, as measured by the Consumer Price Index, rose a scant 0.1% in May on a seasonally adjusted basis, and the Federal Reserve may be done with raising interest rates, while economic growth is stronger than expected. The list of bullish fundamentals is much longer than the list of bearish signals, and a turning point in the outlook could be taking hold.
Economist Fritz Meyer yesterday said inflation is slowing rapidly and warned of a period of deflation.
At his monthly webinar for CFP, CPA, CIMA, CFA professionals, Mr. Meyer showed several charts tracking inflation expectations, including the two shown below.
Stock investors are assuming the debt ceiling problem would be resolved. Otherwise, stocks would have plunged this past week.
An investment’s risk is usually defined as its standard deviation. The financial press and investment marketers cannot be faulted for defining risk as standard deviation. Reducing the concept to a single statistic makes it easy to understand. However, standard deviation expresses only one aspect of investment risk. It totally misses the more important human component: how you will behave in reaction to your wealth disintegrating in a crisis like the 2008 global financial meltdown. That’s what really matters in managing wealth strategically.
With a recession more likely following the banking crisis in March, small business owners and those starting new businesses receive some relief from this new tax break that became effective in 2023.