The Fed’s aggressive interest rate hikes to control the stubborn inflation have dampened investor sentiment. With investors trying to protect their capital by selling shares, the S&P 500 has lost more than 20% year-to-date, while the tech-heavy Nasdaq has fallen more than 30% over this period.
Additionally, September’s hotter-than-expected inflation and employment data have strengthened the case for the Fed to announce another aggressive interest rate hike in its November meeting. The central bank’s strong determination to keep hiking interest rates until inflation is under control has raised fears of a recession.
