- In the past week, the markets moved into a dangerous new phase where moves that are statistically rare across asset classes are becoming the norm.
- Mark Connors, the former global head of risk advisory at Credit Suisse, says that rising volatility in what is supposed to be some of the safest fixed income instruments in the world could mess up the way the financial system works.
- He said that could force the Fed to support the market for Treasury bonds. If that happens, the Fed might have to stop its quantitative tightening program earlier than planned.
- The other worry is that the markets’ wild swings will show up in the weak hands of asset managers, hedge funds, and other players who may have taken on too much debt or risked too much. The markets could be shaken up even more by margin calls and forced sales.
Wall Street is worried about
As the Federal Reserve steps up its efforts to control inflation, the dollar is going up while bonds and stocks are going down. This is making people worry that the central bank’s campaign will have unintended and possibly bad results.
In the past week, the markets moved into a dangerous new phase where moves that are statistically rare across asset classes are becoming the norm. Most of the news is about the drop in stock prices, but Wall Street veterans say that trouble is brewing in the big global markets for currencies and bonds, where things are moving around and interacting.
READ MORE ARTICLES;
- Want to Return Clothes? At this Fast Fashion Retailer,
- Airborne Hyperspectral Imaging Systems Market Analysis (2022-2028)
- Intermediate bulk containers market type, application, key players, geographic scope, and forecast
- Japan will pay 46.6 bill for U.S. chip production
- Uniswap needs $100 million to expand its services.