Global Matters Weekly – 9 May 2022

Central banks get serious

by Robert White, CFA

After the first 50bps interest rate rise by the Fed in over 20 years (with more to come) and the announcement of quantitative tightening starting in June, there is no doubt that the Fed is getting serious about containing inflation. Inflation data in April continued the pattern of the past year, generally exceeding expectations, with price rises becoming more broadly based and accelerating to multi-decade highs in the US and Europe.

Strong demand, supply chain shortages, and war in Ukraine have combined to push producer price inflation (PPI) in the US up by 11.2% in the year to March

Market Snapshot

  • Global equities fell 1.1% last week.
  • Most indices saw declines after a volatile week with interest rates and inflation fears weighing on sentiment.
  • Brent crude rose 2.8% to $112.4 a barrel following an EU proposal to ban Russian imports.
  • Gold fell 0.7% to $1883.8 per ounce