NEW YORK, June 15 ― World stocks fell for a second day in a row yesterday while government bond yields and the US dollar clung to multi-year highs, as surging inflation led investors to brace for what could be the largest US interest rate hike in 28 years this week.
The analysts said they expect the Fed to raise rates by another 75 basis points in July, and predict that higher rates will likely bring on a recession in mid-2023. MSCI's gauge of stocks around the world dropped 0.65 per cent to levels last seen in November 2020, while a pan-European equity index slumped 1.26 per cent to March 2020 lows.
Investors' repricing of higher rates has pummelled assets that benefited from rock-bottom interest rates, including stocks, crypto, junk-rated bonds and emerging markets.