We know that the markets continue to second guess the Federal Reserve’s (Fed’s) commitment to staying high(er) for longer with respect to interest rates. In fact, markets continue to have the Fed decreasing the federal funds rate considerably, to 4.25%-4.5%, later this year. The assumption from markets is that since the U.S. economy is going to enter a recession, the Fed is going to have to cut interest rates to help bring the economy out of recession. This would probably be a good expectation had inflation remained at or below the Fed’s target as was the case on previous occasions when the Fed actually started ... (full story)