* Treasury Sec. Yellen downplays US recession risk
* Peak inflation signs are emerging, but questions remain on how fast it can fall
* US economic headwinds strengthen via slower growth and more rate hikes
* Wall Street sees possibility of rate cuts for 2023
* Gold can’t catch a break, despite high inflation
* Eurozone economy contracts in July via PMI survey data
* German business sentiment falls to 2-year low in July
* Africa and south Asia expected to bear brunt of climate change instability.
* A survey-based GDP proxy shows the US economy contracting in July:

US gasoline prices fall for fourth straight week. “I spoke to three big chain retailers. … They all said of demand in the last three weeks, we’re down 5% or 6% from the same weeks last year,” says Tom Kloza, head of global energy research at OPIS.

Former Treasury Sec. Larry Summers says “We do need strong action from our central bank” to fight inflation. Although he’s he’s “encouraged” by the Fed’s recent commitment to reduce pricing pressure, he’s skeptical that the US can avoid a so-called soft landing. “There’s a very high likelihood of recession when we’ve been in this kind of situation before. Recession has essentially always followed when inflation has been high and our employment has been low.”

Strong dollar reduces US corporate profits sharply in second dollar for firms with substantial overseas operations.
“Even if the rise of the dollar was to stop here, the strengthening we’ve seen over the past 12 months would be enough to prompt further downgrades to earnings estimates just because of the foreign exchange headwinds,” says Max Kettner, a strategist with HSBC.

The 60/40 US stock/bond strategy will recover, predicts Morgan Stanley’s chief cross-asset strategist. The strategy has endured a rough ride in recent history, posting its deepest first-half decline in more than three decades.