Market outlook 2022: Blooming in new market dynamics

Emerging markets are set for the best decade ahead as the global stock markets rebounded sharply from March 2020 lows. Thanks to the overwhelming amount of liquidity put to work by US Fed and other major counterparts around the world. In relatively quicker response to coronavirus, the Fed has been buying 120 billion in bonds every month — 80 billion in Treasuries and 40 billion worth of mortgage backed securities.
Since inflation is running hot at 6.9% with no signs of easing to average historical norms anytime soon, the US Federal Reserve has decided to speed up its taper timeline on account of high inflation and a stronger labour market.

Though, the same can not be said for global economies synonymously, which are facing significant headwinds due to continuous mutations of COVID-19.

Markets are expecting 3 rate hikes in 2022 from Fed along with reducing the current bond buying program to zero by March. Although, the rising omicron cases may prevent the aforementioned three hikes in federal funds rate. (currently near zero at 0.25)

Last updated on April 20th, 2023 at 06:16 am