After enduring six months of rising inflation, Americans could feel the pinch even more in the second half (H2) of the year, according to a banking expert who has warned that the country’s economic turmoil is about to s ‘aggravate.

The annualized inflation rate recorded its highest jump in May since 1981 as President Joe Biden’s administration faces pressure on how to rein in soaring costs, exacerbated by record gas prices blamed on the war in Ukraine. Compounding the poor economic outlook is news last week that at 20.6%, the S&P 500 suffered its biggest first-half decline since 1970.

But inflationary pressures are likely to worsen, according to HSBC’s chief global strategist Joe Little, who said the era of inflation and historically low interest rates is over. “All headwinds for investment markets are now becoming headwinds,” he told CNBC on Tuesday. “This indicates an ongoing phase of market turbulence.”

The network reported that HSBC Asset Management advised investors that supply shocks, high commodity prices and the transition of governments’ climate policy meant the “economic regime appears to be changing”.

“Investors will need to be realistic about return expectations,” Little said, while Jim Reid, head of global fundamental credit strategy at Deutsche Bank, said in a research note “the good news is that the first semester is now over, the bad news is that the outlook for H2 is not looking good.”

Dave Pierce, director of Utah-based Strategic Initiatives, told CNBC on Tuesday that inflation had yet to peak and there was no immediate sign that oil prices would recover. “I don’t see how we can stop the inflation we have,” he said.

There are growing fears of a recession, which is usually defined by two consecutive quarters of negative growth, although in practice it is decided by the National Bureau of Economic Research’s Business Cycle Dating Committee, which examines a number of number of factors, such as the job market, which is currently robust.

However, the analysis provided by the Oxford Economics think tank Newsweek with last week said “stubbornly high inflation” and the Federal Reserve’s commitment to bringing it down through interest rate hikes “support the deepening sour mood on Wall Street and Main Street”. In June, the Fed announced a 0.75% rate hike, its biggest hike since 1994, to combat soaring consumer prices.

“There is no doubt that households are struggling to keep pace with inflation,” said Oxford Economics. “If taxes are added to the mix, their fate looks bleaker as real after-tax incomes fell in three of the first five months of the year and were down nearly 2% over the period.”

With inflation weighing on consumer sentiment and limiting consumer spending, Bill Adams, chief economist at Dallas-based Comerica Bank, said the good news was that national average gasoline prices were down. from their mid-June peak. Prices for other commodities, such as crude oil, natural gas and metals, also fell.

“If this trend continues, it will help calm inflation in the second half of 2022 and limit the extent to which the Fed finds it necessary to slow the economy with higher interest rates,” he said. . Newsweek.