Second quarter Gross Domestic Product (GDP) came out on July 28th declining 0.9%, the second straight quarterly decline. The “Are we in a recession or not?” talk turned business TV into a sports debate show. There are convincing arguments on both sides.

The Fed raised interest rates by another 75 basis points. This was not a surprise; it was the expected outcome. Inflation is way too high, and the Fed is moving aggressively to contain it.

Inflation remains the biggest concern hanging over markets with headline inflation reaching a 40-year high; this has created a tough environment for bond investors and the Fed has indicated they will do “whatever it takes” to combat inflation.

We’re past the midpoint of 2022 and like Bon Jovi, many investors feel like they are living on a prayer.

Despite recent economic woes, there’s some good news to share. Mind-numbing losses have historically been a precursor to great future returns.

The first six months of 2022 were pretty abysmal. But we have reason to believe the rest of the year may not repeat the wealth destruction of the past six months. Savant’s Investment Research team reviews key economic indicators and historical returns to help put the last six months into perspective.

From an economic point of view, things have gotten so off-kilter that people are beginning to wonder if a period of stagflation might set in. Investment research analyst Danny Noonan examines the situation.

The monthly inflation report came out last week and was not well received. Inflation was up 8.6% in May, the highest inflation number since 1981. Six of the past seven inflation reports have been the highest inflation readings since 1981.

As bad as things feel right now, we must remind ourselves of what we can and cannot predict or control. A good night’s sleep and some patience can go a long way in preventing serenity now from becoming insanity later.

Bear markets create trying times; hardly a week goes by without a significant news story that shakes already dwindling investor confidence. But history has shown that markets have historically rebounded to new highs, given time.

The risk of recession is clearly elevated given the inflation situation. While consensus opinion may call for a slowdown, acting on that call may not be the winning bet.

It’s no secret – inflation has been bad. Although the current situation feels bleak, there’s reason to believe we may be through the worst of it.