- In a global selloff, stocks fell to a 13-month low amid concerns about the federal reserve's capacity to control inflation without plunging the economy into recession.
- The S&P 500 fell more than 3%, as the Treasury curve widened, with the spread between five- and 30-year rates reaching its biggest since March. Investors are becoming increasingly concerned about the Fed's policy restrictions at a time when supply-chain disruptions, as a result of the raging war in Ukraine and China's COVID lockdowns, pose a serious danger to inflation. Consumers in the United States expect prices to be higher in three years than they were a month ago, according to data released on Monday, a concerning sign for officials trying to keep longer-term expectations grounded.
- Bitcoin has dropped below $32,000, a 50% drop from its all-time high.
- Energy producers, the market's strongest industry in 2022, were also hit by the selloff, as crude fell, the group fell by more than 8%. Tesla, Amazon, and Nvidia were all hit hard, losing at least 5% of their value. The CBOE Volatility Index reached new highs for the first time in two months.
- After chair Jerome Powell talked down the possibility of a 75 basis-point rate hike on Wednesday, traders will be paying careful attention to a number of central bank speakers this week. President of the Federal Reserve Bank of Atlanta Bostic said that he prefers policymakers to keep raising rates in half-point increments rather than doing something more drastic. While he sees minimal prospects for a 75-basis-point raise in the next few months, Bostic noted in a later interview with Reuters that he's "not taking anything off the table."
- Wednesday's consumer price index report is the high point of an otherwise quiet week for economic data. On a monthly and annual basis, inflation is expected to have eased, partially due to a drop in gasoline prices that has since recovered. While inflation likely reached an all-time high of 8.5% in March, the most in four decades, price pressures are projected to stay high in the months ahead, leaving Fed officials on track to gradually raise borrowing costs.