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With the April numbers in the books, let's jump right into the charts. The big story from last month was once again inflation. Following an increase of 26.89% year-over-year of the M2 Money Supply, US inflation reached 8.54%. According to Kristalina Georgieva, an IMF Director, we are currently dealing with unintended consequences from excessive spending, which was done to support the economy during the COVID-19 recession. With rising inflation, The Real Interest Rate for a 1-year US Treasury bond dropped to -7.21%, which is the lowest reading since 1951. According to John Authers, an editor at Bloomberg, higher inflation correlates with a lower P/E Ratio, which currently stands at 20.76 for the S&P 500. |
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