Introduction
Global equity markets fell significantly in June as surging inflation and aggressive policy stances by globalcentral banks heightened concerns about a potential recession. The U.S. Federal Reserve Board (“Fed”)raised the target range of its federal funds rate by 75 basis points (“bps”), while the Bank of Canada(“BoC”) raised its benchmark overnight interest rate by 50 bps. The Bank of England (“BoE”) raised itsBank Rate by 25 bps, and the European Central Bank suggested a 25-bps rate increase is likely in July.
In Canada, the S&P/TSX Composite Index dropped, with all 11 sectors finishing in the red. The Health Caresector posted the biggest decline. In the U.S., the S&P 500 Index also fell, dragged down by the Energy andMaterials sectors. The tech-heavy NASDAQ Composite Index fell almost 9% over the month. Yields on 10-year government bonds in Canada and the U.S. increased over June. Oil and gold prices both fell.
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