Citi's Institutional Client Group Chairman Leon Kalvaria noted that “people are worried about a recession” as inflation outpaces wage growth.
Citi's Institutional Client Group Chairman Leon Kalvaria notes that"people are worried about a recession" as inflation outpaces wage growth.
Kalvaria noted on Wednesday that "we’ve had big wage increases, but, at the same time, between inflation, and food, and energy, as we all know, that is a highly regressive tax and folks care about net after-tax pay as opposed to gross pay." Earlier this month it was revealed that inflation cooled on an annual basis for the first time in months in April, but rose more than expected as supply chain constraints, the Russian war in Ukraine and strong consumer demand continued to keep consumer prices elevated. The Labor Department said earlier this month that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 8.3% in April from a year ago, below the 8.
Those figures were both higher than the 8.1% headline figure and 0.2% monthly gain forecast by Refinitiv economists. The Federal Reserve now faces the tricky task of cooling demand and prices without inadvertently dragging the economy into a recession.
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