CPI, Fed, and Recession
1. Goldman Sachs has raised the risk of a U.S. recession to over 40%.
![CPI, Fed, and Recession](https://ussnsimg.moomoo.com/sns_client_feed/1629598/20240814/3d53ecf423fb5af99ffc3821631f99f5.png/big?area=999&is_public=true)
2. PPI data continued to decline (up 2.2% YoY; core PPI up 3.3%). Ahead of today’s CPI report, the market is betting on a Fed rate cut in September.
![CPI, Fed, and Recession](https://ussnsimg.moomoo.com/sns_client_feed/1629598/20240814/045f6cfe3a65575c2fe2ca9a079486ed.jpg/big?area=999&is_public=true)
3. JPMorgan sees rising recession risk across asset classes, with 5-year Treasuries and base metals being the most vulnerable, while high-credit and high-yield bonds may perform better. Small caps like Russell 2000 and cyclical/defensive stocks have lower recession risks.
![CPI, Fed, and Recession](https://ussnsimg.moomoo.com/sns_client_feed/1629598/20240814/4254bea116ee5355adf03ca91551a78a.jpg/big?area=999&is_public=true)
4. Despite rising recession odds, expectations for a September rate cut have grown. The market is pricing in a 40 basis point cut, with over 100 bps expected this year. Although tech stock overvaluation has caused recent crashes, a full collapse seems unlikely. Analysts suggest the market may not hit new highs, but it’s also unlikely to completely fall apart.
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B00GIE : Goldman sachs puts gettin cooked