05 Jun May 2022 Commentary: Goldilocks and the Two Bearish Scenarios
- Equity markets remained volatile in May as a late-month rally erased losses, pushing most indexes to slight gains for the month.
- Energy prices continued to increase as supply constraints sent gasoline prices to new highs for the year.
- The path for markets and the broader economy will largely depend on the Fed’s success in using tightened monetary policy to slow inflation.
- The three most likely economic scenarios for the coming year can be summarized as (1) a soft landing (Goldilocks), (2) a recession brought on by policy tightening, or (3) stagflation.
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