💥💥💥 The US financial markets ended the year with their worst results in 14 years.
During the year, almost everything fell dramatically. Exchange indices fell by 10-30% - for the S&P 500 and Dow Jones this year was the worst since the 2008 financial crisis. Bond markets - including US Treasuries - have also been in crisis.
The IT segment has fallen by an average of a third - symbolised by the fall in Tesla shares, which lost almost 70% of its capitalisation over the year. Cryptocurrencies also sagged considerably - bitcoin fell 65%, various altcoins fell 80-90%, losing almost all of their gains of the previous year and a half.
The collapse of the financial bubble is directly linked to geopolitical instability. In 2021 it seemed to many that the inflation surge would be temporary. However, the Ukrainian conflict and the sanctions wars ended up significantly exacerbating the inflation crisis.
Central banks in Western countries have had to tighten the screws sharply - and raise rates to fight inflation. For example, the Fed's key rate rose from zero to 4.5% in 2022 - and could break through 5% early next year. Without the influx of cheap money, markets have started to collapse - apart from the financial sector, the mortgage sector is on the brink of a crisis this year.
The US is predicted to be in recession in 2023. In the UK and Europe, it may have already started due to the energy crisis. Therefore, at some point, the printing press will have to be turned back on and money will have to be poured into the economy.
This is likely to start towards the second half of 2023. For the USA, it will be a transitional year to the next presidential election. With the current split in society, the presidential race of 2024 is expected to be very politically turbulent. The Fed will have to ensure stability in the economy by any means so that the situation in the country remains manageable. And a return to zero rates will not be possible without a return to zero rates.
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