sunk to 2-year lows on the specter of recession

“Everyone is re-evaluating how far the Fed will go, and that’s worrying for the economy,” said Ed Moya, senior market analyst at OANDA.

It was learned this Friday that the US business contracted for third consecutive month in September, albeit at a slower pace than in the previous month. The S&P Global The US Composite Output PMI, which tracks the manufacturing and services sector, rose to 49.3 this month from a final reading of 44.6 in August, it said Friday. However, it remains below 50, indicating a contraction in private sector activity.

The The country’s gross domestic product has contracted in two consecutive quarters. The economy slows as the Federal Reserve is aggressively tightening monetary policy to cool demand and bring inflation back to the US central bank’s 2% target. On Wednesday, the entity raised interest rates by 75 basis points, the third consecutive increase of that magnitude, and has indicated that there will be even bigger hikes this year in an attempt to inflation which registered 8.3% year-on-year in August, less than in the previous month but more than expected.

The dollar also peaks in two decades and the bonds are rising again fearing another rate hike as the UK’s assets collapse after the country’s announcement of tax cuts and a rise in debt. The pound collapsed, breaking the $1.10 token barrier for the first time in 37 years.

During the week, the major central banks have implemented or announced rate hikes again given ongoing inflation. Japan intervened in the market for the first time since 1998 and banks in Sweden, Switzerland and Norway also increased their rates. For its part, the Fed expected it to expect high interest rates to persist through 2023.

world stock index MSCI hit its lowest level since mid-2020 on Friday.with a loss of about 12% in the month since Federal Reserve chairman Jerome Powell made it clear that inflation must be reduced, despite the adverse effects this could have.

The 10-Year Debt Yield Up 5 bps to 3.8%another 11 1/2 year high, and is on track for its eighth weekly rise in a row. Eurozone bond yields also rose sharplyand Italy’s 10-year yield reached 4.3%, its highest level since late 2013, ahead of Sunday’s Italian elections.

The Fed’s latest moves make us feel like the end of rate hikes is far from in sight,” he said. Rick Meckler, partner at Cherry Lane Investments and added: “There is very little positive news at the moment and that could lead to some sort of definitive pullback. It is certainly possible that we can get closer to the lows in the near term.”

The poor outlook for a handful of companies – most recently FedEx Corp and Ford Motor Co – has also contributed to the woes in a seasonally weak period for the markets.

Goldman Sachs has lowered its year-end target for the benchmark S&P 500 index by about 16% to 3,600 points, down 2.5% from current levels..

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