Let’s Talk About Interest Rates
Inflation has been wreaking havoc in equity markets across the globe as investors continue to see the indiscriminate compression of corporate valuations and a seemingly endless decline in share prices. With the March 10th, 2022 Consumer Price Index (CPI) report indicating that inflation has risen again to 7.9%, the eyes of investors in the U.S equity markets gaze cautiously towards the Federal Reserve. This post will explore the Federal Reserve's most recent statements concerning their response to the increasing inflation pressures and what we might see going forward.
Who Removed The Easy Button?
The US financial markets entered a period of heavy turbulence at the end of November 2021 that lead to a significant decline in U.S equities over the following 3 months. At the time of writing, US-listed equities have seen the indiscriminate P/E compression of future cash flow-dependent businesses as stock prices continue to plummet in the wake of macroeconomic and geopolitical shifts. Let’s explore the three main catalysts causing this most recent stock market correction.