Repricing, Risk Aversion and Rejected Energy
COVID still afflicts economies, the war in Ukraine continues to put pressure on commodity prices, inflation remains out of control, and interest rate increases continue to be used as the solution to spikes in CPI. These forces are now overwhelmingly seen as potential precursors of a global recession. Equity markets in June reflected fears of a structural and prolonged shift from global growth promoting cheap capital to more expensive funds and a stagnating macro environment. At the beginning of the month, the World Bank released a revised forecast for global growth, from the 4.1% estimated in January to 2.9%; a material reduction.