Does the drop in gas prices mean inflation has peaked? Economists’ expectations are changing, as Patti Domm reports for CNBC. The Fed’s efforts to control inflation are lowering bond yields. Kathy Jones, chief fixed income strategist at Schwab, offers a forecast for the second half of the year. Medicare could run out of money by 2028. Senate Democrats have reached agreement on a way to stave off a Medicare bankruptcy, as Sahil Kapur and Frank Thorp V write for NBC.
Consumer Inflation Could Be Peaking — Consumer prices continued to shoot higher in June, with the headline consumer price index expected to reach 8.8% year over year, according to Dow Jones. But economists say that considering the falloff in gasoline prices, June’s headline CPI could be the peak of inflation for now. Core inflation, excluding gasoline and food, is expected to go from 6% in May to 5.7%, the third month in a row of slowing. Read more…
Fed Rate Hikes: Why Are Bond Yields Falling? — It looks like the Fed’s actions and pledge to bring inflation down have resonated with the market. If the Fed follows through in hiking rates as much as the recent projections indicate, the risk of recession rises. Consequently, bond yields have been pulling back from recent highs and the yield curve has flattened. Kathy Jones of Schwab makes the case for lower bond yields in the second half of 2022. Read more…
Senate Democrats Reach Agreement To Raise Taxes On Some High Earners — The money would be used to pay for Medicare to try to keep the federal health care program from going bankrupt. Sahil Kapur and Frank Thorp V describe how their plan works. Read more…
John R. Day, Bill Ennis, and Matt Heller
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