Welcome to our latest weekly market update, as we survey the action in the US, Europe Asia and Australia, and touching on Oil, Gold and Crypto as we progress.
Investors begin a new quarter wondering if the fighting in Ukraine, the isolation of Russia and the Fed’s increasingly hawkish turn will engender still more volatility and losses for stocks and bonds.
As the bets of aggressive Fed action continue to be priced into markets, fears are growing that the Fed may slow growth by too much and tip the economy into recession. The U.S. yield curve extended its recent flattening as Treasury yields, which retreated earlier in the week as portfolio adjustments boosted demand for bonds, spiked again on Friday, causing a closely watched part of the yield curve to invert for the third time this week. The yield on the 2-year Treasury bond (2.4625%) jumped above the yield on the 10-year Treasury note (2.389%).
An inversion of the yield curve, when shorter-dated yields rise above longer-dated ones, is seen as a harbinger of a recession in the next one or two years.
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