A philosophical question for you before we dive into the latest.
Is the world more uncertain right now than it has been in the past?
Or are we simply more aware of our lack of predictability and control?
You don’t have to go far to see headlines about uncertainty these days.
But is the world actually any more uncertain than it was two years ago? Or the years before that?
I’m not sure it is.
Our crystal balls have always been murky and unreliable, but sometimes we are forced to reckon with how little we actually know about what happens next.
I think this is one of those times.
All of us (economists and financial professionals included) are grappling with how little we can predict the future, and that’s being reflected in markets as well as the news.
What’s up with inflation?
We’re waiting for the next official inflation estimates for May, which economists expect to have edged down slightly from April.1
If the data comes in lower, it could indicate that inflation peaked in March and is headed back down from 40-year highs.
That would be a relief for everyone.
What’s driving markets?
Markets finally broke their losing streak, but it’s not clear yet whether we’re seeing a temporary rally or a return to optimism.2
Investors are still waiting to see whether prices have peaked and if the Federal Reserve has the ability to execute its policy plans.
Bottom line: We might experience a rocky summer as investors digest the data and look for a path forward.
That might be frustrating after the volatility we’ve already experienced this year, but it’s part and parcel of the market environment right now.
I don’t know how the summer will play out, but I can offer reassurance: we’re prepared for this and we’re watching closely.