Federal Reserve chair Jerome Powell’s announcement, indicating that yesterday’s 50-bps interest rate hike may be the first of several more required to ensure that the inflation rate may be limited to 2%, knocked the wind out of the market, which was recently buoyed with expectations of a stance reversal by the central bank in the foreseeable future.
In lockstep, the Bank of England and European Central Bank followed suit by raising their respective interest rates by half a percentage point earlier today. With businesses in developed economies set to be weighed down further by higher borrowing costs, most growth estimates seem to have gone out of the window.
