09/30/2022 – Are we over the worst already, or is this 2008 Reloaded?
Though capital markets began to rally at the start of the third quarter, unfortunately this turned out to be a bear market rally. In fact, by the end of September, almost all leading indices were well below levels from the end of June 2022. In particular, the US displayed a significantly more stubborn core inflation rate, which prompted the FED to adopt an aggressively restrictive stance in its interest rate cycle (“more and longer”) during September. This duly surprised markets after the assumed “peak” inflation had been reached in June at a level of 9.1%, leading to further sell-offs. The US Treasury’s 2-year yields rose by over 4% – a level unprecedented in a long time.
Read more in the Strategy Update from the third quarter 2022.
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