- The US stock market experienced its worst monthly drop since March 2020, as markets were repeatedly battered by the Federal Reserve's determination to keep raising interest rates until inflation is under control.
- The S&P 500 ended the volatile session lower. For the first time since 2009, the index lost three consecutive quarters. US Treasuries fell on Friday following a late selloff into the month's end, with the benchmark 10-year yield hovering around 3.80%.
- Since the Central Bank delivered a third jumbo hike last week, risk assets have been in a tailspin, with officials repeatedly warning of more pain to come. This week's market turmoil for the UK was exacerbated by the government's announcement of sweeping tax cuts that threatened to exacerbate inflationary pressures, and the Bank of England attempted to manage the ensuing chaos.
- Fed Vice Chair Lael Brainard allayed fears on Friday by acknowledging the need to monitor the impact rising borrowing costs may have on global market stability. However, markets remained volatile as investors grappled with continued strength in personal consumption expenditure, one of the Fed's preferred inflation indicators.
- Investors are now looking forward to next week's jobs report for more clues about the Fed's rate-hike trajectory. The upcoming inflation and GDP readings will also reveal whether price pressures are easing significantly. All eyes will be on the earnings season, which begins next month, to see how companies are dealing with headwinds such as a strong Dollar, rising expenses, and slowing demand. Fears of a global recession continue to mount as the threat of higher interest rates saps growth.
