The major benchmark indexes outperformed yesterday after the Fed raised the interest rates by 50 basis points and announced that it would reduce its balance sheet from next month. The possibility of the central bank’s tighter monetary policy reducing the multi-decade high inflation generated investor optimism.
However, persistent geopolitical tensions, intensifying supply chain disruptions, and rising oil prices are expected to keep the stock market under immense pressure in the near term. Therefore, we think this could be an opportune time to invest in wide-moat stocks (or shares of companies with a unique competitive edge over peers) since they typically withstand tough times without significant detriment to their business.
