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By Kristin Myers, Editor-in-Chief

What's Happening Today

So how do you feel about inflation? Is it making you more pessimistic about your finances and your economic outlook for the future? If you said yes, you're not alone. Consumer confidence in the U.S. has been battered by inflation and recession fears, with a new reading from the Conference Board showing that its Consumer Confidence Index sank to 95.7 in July, lower than expectations. The index shows how consumers feel right now about business and labor conditions.

How does this number compare to other months and years? The figure is the lowest we've seen in more than a year and is a steep drop from the beginning of the year when consumer confidence notched a score over 113. Consumers weren't optimistic as they looked at the future either. An index of expectations dropped to 65.3, down from 65.8 last month. That's its lowest reading in nearly a decade.

These feelings about inflation and concerns about a recession in the future come as the Federal Reserve kicks off its two-day policy meeting today, where bankers will decide on the next steps in the central bank's inflation fight. Currently, markets are overwhelmingly anticipating an interest rate hike of 75 basis points. Higher interest rates could slow economic growth, bringing inflation down, but increasing the likelihood of a recession.

Retailers are also sounding the alarm about the impacts of inflation. Ahead of its second-quarter earnings, Walmart warned that inflation was weighing on profits, and changing consumer spending habits. Stocks are falling today, with shares of Walmart and other retailers leading losses on the S&P 500.

- Kristin

Editors' Picks

IMF Slashes Global GDP Forecast as Economic Outlook Grows 'Gloomy and More Uncertain' (CNBC)

Fed Prepares Another Rate Increase as Wall Street Wonders What's Next (The New York Times)

US New-Home Sales Fall More Than Forecast to Two-Year Low (Bloomberg)

Home-Price Growth Stayed Strong in May (The Wall Street Journal)

Lagging Economic Indicators and How To Use Them (The Balance)

History of Recessions in the United States (The Balance)

Steps To Creating a Good Estate Plan (The Balance)

Term of the Day

Consumer Confidence Index

The Consumer Confidence Index is a measurement of Americans' attitudes about current and future economic conditions and tells you how optimistic people are about the economy and their ability to find jobs.

The Conference Board created the index in 1967. The current number compares the most recent month's confidence to what it was in 1985. That year, the index was 100. If the most recent index is above 100, then consumers are more confident than they were in 1985. If it's below 100, they are less confident than during that time.

Investors and stock market analysts often monitor the Consumer Confidence Index closely to get an idea of whether consumer spending will increase or decrease. Any rise can spur business spending to meet the demand. That increases earnings and stock prices. For that reason, investors may be more likely to buy stocks if the Consumer Confidence Index rises.

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Off the Charts

As the Fed hikes interest rates to combat inflation, the 10-year Treasury yield and average mortgage rates have climbed over the past few months. Fixed mortgage rates tend to follow U.S. Treasury yields, and those higher yields mean higher rates on mortgages, as shown by the chart below.