After experiencing significant volatility since the beginning of the year, the stock market stabilized briefly. However, the benchmark stock indexes have declined again over the past five days on concerns over further sanctions on Russia and the possibility of more extensive interest rate hikes by the Federal Reserve to tame soaring inflation.
Inflation has climbed to a multi-decade high. February data indicated a 7.9% rise, its highest since January 1982. Recession fears loom because inflation is expected to rise higher amid a tight labor market and a surge in crude oil prices. The Federal Reserve has indicated that it will implement aggressive interest rate hikes to stem the skyrocketing inflation. Also, the talks between Russia and Ukraine have failed to make any significant headway, and the United States has imposed a new round of sanctions on Russia. All this should drive further market volatility.
