In December, US 10-year Treasuries were seen yielding 2 per cent, JPMorgan said stocks would rise 5 per cent, and Goldman said bitcoin could hit $US100,000.
has ended one of the most powerful equity bull markets and sent safe-haven government bonds and other assets spiralling. The SP 500 is down 23 per cent, 10-year rates stand at 3.23 per cent and bitcoin has shed more than half its value.
“This is absolutely the end of TINA for the foreseeable future” said James Athey, investment director at abrdn in London. “With 8 per cent inflation not much is attractive on a real basis.”Even Jerome Powell, the US central bank chairman, didn’t see the turbulence that was coming from inflation. He expected price gains to decline to levels closer to the Fed’s longer-run goal of 2 per cent by the end of 2022.
Stocks and bonds together are on track for their worst quarter ever. Meanwhile, credit markets have also taken a battering.So far this year the worldwide pool of the safest corporate debt has shed more than $900 billion, marking its worst first half of a year on record, according to Bloomberg index data. Measures of corporate credit risk are also spiking, with default swaps insuring the debt of Europe’s high-grade firms sitting at the highest since April 2020.
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