Fighting inflation won’t be quick or painless

Well, I’m not saying I told you so, but the B&S (brief and shallow) recession hypothesis—which markets seemed to be betting would end rising interest rates—died yesterday. The Dow dropped 600 points—its largest drop since June. That saves Fed Chair Jay Powell from having to play the bad guy when he speaks at the Fed’s Jackson Hole conference later this week. The bottom line in all of this: Inflation fighting is hard work. It won’t be that quick, or that painless.

Rising uncertainty about the war in Ukraine also seems to have played a role in the market’s newfound pessimism. “The Russia-Ukraine war looks increasingly unlikely to wind down before it causes winter energy shortages and a severe downturn in Europe,” Bill Adams, Comerica Bank’s chief economist, told Fortune.

The good news? The Great Resignation seems to have eased a bit, with the overall quit rate at 4.1% in July, down from 5.9% a year ago.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

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This edition of CEO Daily was edited by Chloe Taylor.