A Bad Year for Markets?
After a remarkably strong performance in 2021, financial markets now seem to be coming to terms with the likelihood that fiscal and monetary policies will tighten in 2022. Though a bearish outlook may not yet be warranted, the possibility that equities could suffer a net-negative year must be taken seriously.
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LONDON – Last month, I identified what I saw as the big issues of 2022, noting that I could not recall a time when there were so many sources of uncertainty, both known and unknown. The main issue was inflation, and now that we are a few weeks into 2022, financial markets appear to be worrying about the same developments that concerned me. In fact, the problems we face are becoming more straightforward – depressingly so.