Good morning and welcome to the Weekender for Saturday, July 8,2023. US equity markets, as measured using the S&P 500, were lower by -1.2%. The falling print was primarily due to economic data showing that the US economy continues to expand, labor markets remain firm, and inflation is sticky. Hence, markets are discounting a longer period of higher interest rates. Such good news flies in the face of a recessionary scenario held by most and suggests that the US Federal Reserve’s dominant rate narrative of needing to keep rates higher for longer may be a thing.
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