Recession fears dominated financial markets after Walmart slashed its profit forecast and reinforced concerns that rate increases will bring the global economy to a halt.
Recession fears dominated financial markets on Tuesday after US retailer Walmart slashed its profit forecast and reinforced concerns that aggressive interest rate rises by central banks will bring the global economy to a halt.citing surging inflation that is forcing shoppers to reduce spending on discretionary items, particularly clothing. But strong demand for commodities lifted the Australian dollar, which briefly touched its highest level in a month at US69.83¢ before steadying at US69.
The first look at US gross domestic product for the April to June period will be released on Thursday, with analysts forecasting a gain of 0.4 percentage points quarter-on-quarter, but many economists are looking for a negative print. If the data shows a contraction, it will probably fuel recession talk further.A few weeks ago, the Federal Reserve was expected to increase its benchmark rate by a full percentage point rate this month following red-hot consumer price index numbers.
“Most countries are experiencing their highest interest rates for many years, and central banks became aggressive to stem inflation,” he said. “However, if they have not been aggressive enough, inflation could return.”
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