Over the past 15 years power and risk in financial markets have shifted radically, according to the Economist.
New investors have flooded into the stock market and, buoyed by pandemic stimulus, most have had an incredible and volatile ride.
But as policymakers are putting the brakes on loose monetary policies, global financial markets are starting to wobble.
The message from the Federal Reserve is that interest rates must rise soon to tackle high inflation. Due to fear of rising interest rates and the current impact to consumers experiencing the highest inflation in four decades, there has been a rocky start to 2022 for investors.
The day-to-day numbers for the broad indices do not do full justice to the jumpiness of markets, reports the Economist. Much of the drama has been beneath the surface, at the stock or industry level. Technology shares in particular have fared badly.
“Bubbles are mediated by changing stories and narratives.” On “Money Talks”, @RobertJShiller, who won a Nobel prize for economics for his work on stock markets and bubbles, explains how the global financial market volatility might play out https://t.co/9Yrd5mO7NT pic.twitter.com/hhuCuLeL0N
— The Economist (@TheEconomist) February 14, 2022
Below is an Economist podcast to discuss…”How might this new high-tech, bank-light system fare under a serious stress test?”
References’
- https://www.economist.com/podcasts/2022/02/09/the-next-financial-crisis
- https://www.economist.com/finance-and-economics/the-reasons-behind-the-current-stockmarket-turmoil/21807379