Interest rates are expected to stabilize soon or even begin falling. The risk is that core inflation might not come down, and a second tightening cycle might be needed.
In a letter to lawmakers today, Janet Yellen says the Treasury Department's "best estimate" is that its extraordinary accounting measures will no longer be able to satisfy all the government's obligations by early June.
The divide between investors with trillions at stake reflects just how tough monetary policy itself has become, as price pressures remain high and readings of headline and underlying inflation send mixed signals.
One of Prime Minister Rishi Sunak's top priorities for 2023 is to cut inflation in half, but three months in, consumer prices are back where they started—rising at an annual rate of 10.1%.
Continuing claims (the number of people who have already filed an initial application and are now claiming unemployment benefits) rose to 1.87 million in the week ended April 8.
"Banks are likely to become somewhat more cautious. That does tend to lead to somewhat greater restriction in credit that could be a substitute for further interest-rate hikes that the Fed needs to make."
Millennials expect they'll need $1.3 million for a comfortable retirement, but only 29% expect to reach that. Older workers say they'll need $1.1 million, and only 21% expect to reach it.
