Equities wobbled on Wednesday and showed some resilience in the face of aggressive FOMC policy action. The FOMC hiked rates by 75 basis points despite a pledge to keep the pace of hikes at 50 basis points per meeting. The move is only the latest in a string of evidence that suggests inflation is out of control. Based on the latest data and talk from the Fed we think it safe to assume there will be another 75 basis point hike in July.

In other news, the pace of retail sales fell by 0.30% in May, worse than expected. The decline is due in large part to rapidly rising prices and the high cost of fuel, neither of which are expected to decline over the summer. The takeaway is that an economic recession is already in the works and investors should expect the worst from the Q2 reporting season.