On Tuesday, Federal Reserve Chair Jerome Powell said the Fed’s aim to keep increasing interest rates until it reduces inflationary pressure. The announcement has intensified current, bearish sentiment in the market. Over the past few weeks, the major U.S. indexes have been facing intense selling pressure. Over the past month, the S&P 500 Index has declined 11.2%, while the Nasdaq Composite Index has slumped 13.6%.
Analysts have raised concerns that the Fed’s tighter monetary policy could precipitate a recession. Amid the current inflationary environment, investors are shifting toward defensive stocks because they can weather uncertain market conditions better than stocks in many other sectors. Companies from defensive sectors, including healthcare, utilities, and consumer staples, tend to have recession-proof business models, given the stable demand for their products.
