News & Updates
Global growth and inflation concerns are keeping investors up at night. Poor activity data reinforced slowdown fears, resulting in falling yields and rising stocks last week. Persistent UK inflation caused worries of overtightening.
Last week’s rally was a welcome relief for equity investors, but questions remain as to the reasons for the move. It seems likely that the market bounce was also driven by some month- and quarter-end positioning from oversold levels, but hopes rose that we could be approaching peak inflation thanks to declines in commodity prices.
A flurry of central bank moves last week has revealed that many are ignoring the crushing effect this will have on growth. This dynamic raises serious growth risks, and we now see the U.S. restart of economic activity stalling over the coming quarter.
Last week proved a bruising experience for global financial markets as several central banks raised interest rates and indicated the policy path ahead appears to be one of further tightening.
The Federal Open Market Committee (FOMC), the US Federal Reserve’s monetary policy setting committee, raised rates to a range of 1.50 – 1.75% last week, a 75 basis points (bps) increase.
The US Fed just made the biggest interest-rate increase since 1994. Should we be worried? Stephen Dover, Head of Franklin Templeton Institute, discusses the rising risk of a recession.