The evidence of red-hot inflation seeping into the economy is sending a chill through investors after major U.S. retailers showed people are cutting back on buying bigger ticket items as they just try and get by.
The turmoil came a day after Federal Reserve Chair Jerome Powell pledged the U.S. central bank would ratchet interest rates as high as needed to kill a surge in inflation."Retailers are starting to reveal the impact of eroding consumer purchasing power," said Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, on the same day his firm forecast a mild recession around year-end into early 2023.
Cantor Fitzgerald said it was unwinding its expectation for a short-term bounce in equities and that if there is a lift, it would likely be shallow and "not worth playing." While investors have been worried for some time about inflation, the latest results pile on worries about the impact of inflation on the consumer, said Ryan Detrick, chief market strategist at LPL Financial.
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