US equities are off to their worst start since 1970, as investors worry about the impact of recent measures to limit inflation on the country’s economy.
The S&P 500 index has down 20.6 percent in the previous six months.
While other major US indices have also fallen considerably.
Stocks in the United Kingdom, Europe, and Asia have all taken a significant hit.
Global central banks are scrambling to keep a lid on skyrocketing living expenses, such as food and gasoline.
As interest rates climb, some experts believe that the world’s largest economy, the United States, might slip into a recession as soon as this year.
Chinese top economist Dan Wang told that “the stock market would respond rather severely” if the US Federal Reserve keeps raising interest rates.
In light of the ongoing conflict in Ukraine and the lingering concerns about a recession.
AMP Capital’s Shane Oliver predicts that short-term volatility will persist in the stock market.
Since 1962, the Dow Jones Industrial Average has fallen by more than 15% in the first half of this year.
The largest decrease in that time span.
At the same time, the Nasdaq Composite, which is heavily weighted toward technology.
Fell by about 30%, marking its worst decline in the first half of the year.
There has been a significant drop in the global stock market this year.
For comparison
By comparison, the UK’s FTSE 250 index has plunged more than 20%.
While Europe’s Stoxx 600 and MSCI indexes of Asia-Pacific markets have both fallen more than 17%.
At the same time, several of the world’s largest central banks are boosting interest rates in an effort to curb the rise in living expenses.
The heads of the world’s three largest central banks cautioned earlier.
This week that the period of moderate inflation and low interest rates had come to an end.
The leaders of the US Federal Reserve, the European Central Bank.
The Bank of England met in Portugal this year and agreed that urgent action was needed to keep inflation from spiraling out of control.
Their concern was that efforts to contain an inflation shock brought on by the conflict in Ukraine.
The ensuing epidemic may harm global economy.
“What if we go a little bit too far?
However, I don’t think this is the greatest threat to the economy “Federal Reserve chairman Jerome Powell made the following statement.
It would be a worse blunder, “let’s put it that way,” if we didn’t restore pricing stability, he said.
This past month, the Federal Reserve issued the largest rate increase it has announced.
In over 30 years as it intensified its efforts to combat rising consumer costs
In addition, the Bank of England increased its main interest rate from 1% to 1.25 percent, the highest level in 13 years.
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