On Wednesday, We’ll Know If The Federal Reserve Will End Inflation By Causing A Recession

Published Friday, January 27, 2023 at: 9:30 PM EST

5106 2

Look for the Federal Reserve Board’s policy statement next Wednesday to help determine whether the inflation crisis ends in a recession. 

The Federal Reserve is at the tail end of a historic battle against the worst inflation in several decades. The central bank hiked rates seven times since March 2022 and is expected to raise rates again Wednesday, when its policy statement is released at the conclusion of the Federal Open Market Committee’s monthly two-day meeting.  

If the hike is 25 basis points, it will keep alive hopes for averting recession and make a recession in 2023 less likely. If it’s 50 basis points, then the Federal Reserve decided to snuff out the insipid inflation threat even if it makes a recession much more likely.   

5106 3

The latest consensus forecast of the 60 leading economists polled quarterly by The Wall Street Journal is for a mild contraction in the second quarter of 2023. One quarter of negative growth would not constitute a recession, and the final two quarters of 2023 are expected to be positive economic growth, although not strong. The point is, the average leading economist is calling for a soft landing and not a recession.

5106 4

The Standard & Poor’s 500 stock index closed Friday at 4,070.56 gaining +0.25% from Thursday, and+2.46% from a week ago. The index is up +81.93% from the March 23, 2020, bear market low and -15.13% lower than its January 3, 2022 all-time high. 

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.   


Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.

This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Contact Us

22994 El Toro Road
Lake Forest, CA 92630
Phone: (949) 470-0700
Toll Free: (800) SHERWOLD
Fax: (949) 470-0707
Email: invest@gwsherwold.com    

Enewsletter

account access