As we head into the end of the financial year and the middle of the calendar year, the late calls to Sell in May and walk away are growing louder as central banks look to be still losing the battle against inflation even with recessions in sight.
A sustained large rally on Wall Street in recent months is under threat given the US Federal Reserve bent on pushing more rate rises into what looks like a fragile economy, with final GDP data and the all-important “personal consumption expenditure” or PCE measure coming around this week. Fed Chair Powell said last week that inflation remained too high, indicating that further interest rate hikes were likely.
Traders are now banking a near 80% chance of a rate hike at the Fed’s next meeting in July:
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