Inflation Is Still Too High—But Moving In The Right Direction

Investors were nervous about risk last month, with August seeing modest market pullbacks across the board. Let’s take a look back at that performance, what was happening in the underlying economy, and whether we can expect inflation to ease in the months ahead.

Risk-Off Mode for Markets

In August, the U.S. indices were down by low single digits, with the Nasdaq experiencing the biggest decline. International markets also pulled back, with developed markets down slightly more than the U.S. markets and emerging markets doing worst of all. Even fixed income declined, as higher interest rates drove the U.S. Aggregate Bond Index down slightly.