Categories: News

August 2022 market update – Central banks likely to continue lifting rates

despite a drop in headline inflation

 

Introduction

Global equity markets started relatively strong in August before pulling back after the U.S. Federal Reserve Board (“Fed”) signalled it would likely keep aggressively raising interest rates to tame inflation. While inflation remained elevated in July, it did slow across Canada and the U.S. In Europe and the U.K., it continued to tick higher, largely in response to upward pressure in energy prices due to the conflict in Ukraine. High inflation hindered global economic activity.

In Canada, the S&P/TSX Composite Index posted a drop, dragged down by the Real Estate and Information Technology sectors. In the U.S., the S&P 500 Index fell, and the tech-heavy NASDAQ Composite Index posted an even bigger drop. Yields on 10-year government bonds in Canada and the U.S. both advanced. Among major commodities, oil and gold prices finished lower in August.

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