June 15th, 2022
The dollar is being squeezed like never before as the U.S. inflation rate hit a 40-year high in May. In more bad news, household wealth declined last quarter for the first time since the start of the pandemic.
The solar panel industry received a jumpstart last week as President Biden declared a 2-year exemption on import tariffs from four Southeast Asian countries. But not all solar companies are happy with the decision.
We’re on the edge of our seat waiting to hear the Fed’s latest interest rate decision which is due out this afternoon. You can check out the live broadcast here. Here’s what else you need to know about this week’s economic events.
What Everyone’s Been Buzzing About
May’s inflation rate was a staggering 8.6%. That’s the highest inflation rate recorded in the U.S. since 1982 and was even higher than analysts expected. After reaching 8.5% in March, inflation dipped slightly in April to 8.3%. But the reprieve was short-lived. Stock markets fell sharply on the news as Wall Street anticipates larger interest rate hikes from the Fed in the months to come.
Protect your portfolio >> Learn how to inflation-proof your investments
For the first time in 2 years, household wealth has declined. A report released by the Fed on June 9th showed that household wealth fell by $500 billion in the first quarter of 2022, thanks in large part to the extended stock market sell-off. Before the latest report, household wealth had climbed for seven consecutive quarters. The Fed’s data also showed that household debt increased by 8.3% in Q1 2022. The one bright spot in the report (if you’re a homeowner) was that real estate values grew by $1.6 trillion.
Biden presses pause on solar panel tariffs. Last week, President Biden announced a 2-year freeze on tariffs for solar cells and modules exported by Cambodia, Malaysia, Thailand, and Vietnam. The announcement is a win for companies who rely on imports from those countries. But domestic solar panel producers are less than pleased with the move.
Kohl’s announces “advanced” buyout talks. Kohl’s stock has declined in 2022 as the company has faced supply chain and inflationary headwinds. However, share prices shot up after Kohl's board announced that it was in advanced takeover talks with Franchise Group (parent company of Vitamin Shoppe). The deal is worth about $8 billion and Franchise Group has been given a 3-week exclusive buyout period to finalize its financing arrangements.
The SEC starts its own TerraUSD investigation. Following TerraUSD’s historic meltdown last month, it was soon revealed that its founder Do Kwon could be facing legal prosecution in South Korea. Now, according to Bloomberg, the SEC is also on Terra’s case. It’s investigating whether TerraForm Labs’ marketing efforts violated federal regulations.
What To Keep Your Eye on This Week
Fed interest rate decision. Following the latest red-hot inflation numbers, many are speculating that the Fed will raise interest rates by half percentage points at its next few meetings. We won’t have to wait long to find out. Fed Chair Jerome Powell will be holding his next interest rate news conference today at 2 PM.
Kroger (KR) Earnings Report. While the overall stock market has stumbled throughout 2022, Kroger (KR) is one stock that’s been flying high. As of writing, its share price has risen 13% year-to-date and 32% over the past 12 months. Many analysts are expecting the massive grocery store chain to beat expectations in its June 16th earnings reports and, potentially, test a new high.
Here are three stories from around the web that our team found interesting:
- The controversy over Biden's solar energy plan (The Week)
- How ‘trustless’ is Bitcoin, really? (New York Times)
- How did they get inflation so wrong? (The Atlantic)
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