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The Federal Reserve Bank of Kansas City will hold its 46th annual Economic Policy Symposium this week in Jackson Hole, Wyoming.

Up until the latest Consumer Price Index (CPI) inflation reading, the Fed had been on quite a winning streak. Annualized CPI had declined for 12 consecutive monthly readings, evidence that while prices for goods and services were still increasing, the pace of price inflation was moderating and moving back towards the Fed’s 2% target.

1099-DIV – Reports ordinary and qualified dividends and short- and long-term capital gains distributions for taxable and tax-exempt accounts. 1099-B – Reports exchange and redemption activity in non-IRA accounts.

“The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to ‘AA’ and ‘AAA’ rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.”

By Dr. George Calhoun – Hanlon Investment Management Advisory Board Member Executive Director of the Hanlon Financial Systems Center

In May, stock indices were being pushed higher despite most of the component stocks trending downwards, because the overwhelmingly dominant size of the mega-caps allowed them to control the overall market direction.

Sean Hanlon, CEO and Co-Chief Investment Officer of Vestbridge Advisors, Inc. talks about and explains the financial environment from the 2023 Mid Year Update.

By Dr. George Calhoun – Hanlon Investment Management Advisory Board Member Executive Director of the Hanlon Financial Systems Center

The first half of 2023 has been marked by lopsided gains, with a handful of mega-cap tech companies accounting for nearly all of the S&P 500’s 16.9% year-to-date returns, through June 30th. In our 2023 beginning of the year Annual Outlook, we cautioned that despite near-unanimous calls for a first-half recession from major financial institutions, we saw potential for a scenario in which US GDP was able to maintain a slightly positive rate of growth thanks to record low unemployment.

The Fed paused on interest rate hikes last week.  At the post meeting press conference Chairman Powell mentioned housing services as a crucial aspect of the economy where the Fed needs to see progress on inflation.