In Q2 2022, financial markets were once again subject to high volatility. They struggled with various problem areas – from central bank policy and rampant inflation to the ongoing Russia-Ukraine conflict – which kept investors on their toes.
Fed bankers continued their path towards monetary normalization: in May, they hiked the reference rate by 50bps, whereas in June – after hotter than expected inflation data – the bank even increased the main rate by 75bps.
Risks for global equity markets remain skewed to the downside, in our view. Over the last few weeks, financial markets’ bear case noticeably moved to the forefront as economic momentum further deteriorated.