The market is totally locked down when it comes to this geopolitical turmoil.”Said Ross Mayfield, an investment strategist at Baird and expanded: “The volatility is likely to remain probably in the short term, and maybe in the medium term, because I just don’t see an acceptable way out in the next couple of weeks for Ukraine or (Russian President Vladimir) Putin.”
What’s more, Rising oil and other commodity prices fueled fears that recent high inflation will combine with stagnant economic growthand make it difficult for the Federal Reserve and other major central banks to manage interest rates.
The percentage of fund managers expecting stagflation in the next 12 months stands at 30%, up from 22% last month, according to a BofA Global Research survey.
“When you have a situation like what is happening in Ukraine, the news is the most important thing and it can change dramatically in a positive or negative way any day, which raises the risk a little bit”said Randy Frederick of Charles Schwab in Austin, Texas.
“Markets are trying to recalibrate what the Fed will do and their views on inflation”said Jeff Mortimer of BNY Mellon Wealth Management, adding that Jerome Powell is proving to be a pragmatic chairman.
“For us it’s about figuring out what inflation is going to be like six, nine, 12, 15 and 18 months from now. That’s really the critical question that we’re trying to answer,” he added. On Wednesday, Wall Street’s main indices rose on Powell’s remarks that he expected a 25 basis point March rate hike.
Source: Ambito
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