Global markets are spooked by geopolitical jitters and ongoing volatility. Many believe that the Russia-Ukraine war is the main culprit for recent market behavior. This may be partly true, but there is another important factor motivating the traders and institutional investors right now!

The mighty United States and its inflation rate…

Some of you are already aware of the fact that inflation has reached new heights worldwide. Here is the board that visually captures the picture!

Inflation Rates in the United States – Breakout and All-Time Highs!

Each time inflation peaked, it signaled some sort of bubble. If history is going to repeat itself, maybe we are living Post-pandemic bubble where prosperity is just another illusion.

Higher inflation has always led to aggressive rate hikes by central banks. This could be the main reason institutional investors pull money out of the markets. Aggressive interest rate hikes from the FED could trigger a cascading effect where global central banks could follow one another in the so-called “Ride Cycle”.

And most of the time, rising interest rates often create sell-offs and crashes in stock prices. Well, this time it might be different or maybe not different after all! Let’s keep an eye, read the table and see how it plays out.

Original post