Here’s why inflation may have peaked — but a recession may still be looming

I hope this newsletter finds you, Even with inflation raging, everything from groceries to gas is more expensive than it was a year ago. Phil Rosen is here, coming to you today from Los Angeles.

No matter how many times the Fed tells us that inflation is temporary, high prices are hard to ignore. But eventually, our wallets may get some respite, one top economist predicts.

But there is a problem. There is always a problem.

here we go.

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Mohamed El-Erian, Allianz Chief Economic Adviser

Muhammad Elian.

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1. Inflation may have peaked, But Mohamed El-Erian, a prominent economist and adviser at Allianz, said there was still pain ahead, even if prices started to fall.

Here’s what he told CNBC on Friday:

“I think inflation in the U.S. has peaked, at least for the next three to four months…but the problem isn’t that inflation is going to come down – that’s a very good thing. The problem is that inflation is going to go along with the economy probably There will be a recession, which is not good news.”

Goldman Sachs says broad slowdown It will also hit corporate America, although it has so far weathered 41 years of high inflation without much impact on profitability.

In the first half of this year, Americans filled the gap in business. But Goldman said U.S. companies will soon find it increasingly difficult to pass on price increases to consumers, making earnings forecasts too optimistic.

“Because jobs are strong, the economy is strong, consumers have savings — so they’re able to pass on most of their savings to consumers,” said a senior strategist at Goldman Sachs.

“I think it’s going to be more difficult to pass it on to consumers and we expect margins to be squeezed,” she added.

In other news:

New York Stock Exchange Trader Dow Jones Equity Trader

Getty Images North America/Getty Images

2. U.S. stock futures rose in early trading on Monday, Investors braced for further interest rate decisions from the Federal Reserve later this week. Meanwhile, Bitcoin fell back below $22,000. Here’s what the market is doing today.

3. On the docket: linde corp., Both Cadence Design Systems Inc. and Axis Bank Ltd. are reporting.

4. UBS recommends stocks that could generate strong returns during a “historically rapid slowdown” that could turn into a recession. According to the company’s analysts, they still believe in the names despite the current brutal market. Here’s a list of 22 stocks.

5. Russian oil normally destined for China is turning to India as competition for cheap crude heats up. On Friday, a cargo carrying Russian oil was heading to eastern India, where an Indian Oil Corp refinery is located. But that’s not all – Iran and Venezuela are also ramping up competition to sell crude to India and China.

6. A new lumber contract will shake up the futures market. Compared to the old contract, it will allow key commodities to be moved in quarter quantities. A Colorado lumber broker told Insider that the shift could send orders flowing into the lumber market soaring and calm price volatility.

7. “Rich Dad Poor Dad” author Robert Kiyosaki warned that inflation in the United States could trigger a historic depression. The personal finance guru said soaring prices and layoffs were red flags for a sharp economic downturn. Kiyosaki also sounded the alarm on home sales and foreclosures with a dismal forecast for U.S. real estate.

8. Bank of America is the most bearish head of equities on Wall Street. Savita Subramanian has cut its target on the U.S. index below that of its rivals. But she said there were eight moves investors should take to profit from an increasingly difficult market.

9. Crypto billionaire Sam Bankman-Fried has a grand plan to bail out crypto companies amid the market rout. He said in an interview with Bloomberg that FTX keeps its treasury in dollars to contain risks, explaining how he assesses which struggling companies can help. In addition, he analyzes why a “moderately bad” trade is possible in the current situation.

Ethereum price on July 25

Ethereum price on July 25

Market Insider

10. Ether rose 50% in the last month. It beat Bitcoin’s gains over the same period as enthusiasm for the cryptocurrency grew after members of the Ethereum Foundation sparked rumors about an upcoming update. However, Ethereum fell 4% in early trading on Monday. Follow the latest price action here.

Keep up to date with the latest market news by checking out Insider’s The Refresh, a dynamic audio news briefing from Insider’s newsroom. Listen here.

Curated by Phil Rosen, New York. (Feedback or tips? Email or twitter @philrosnn).

Edited by Max Adams (@maxradams) in New York and Harlem Bullock (@hallam_bullock) in London.

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