Prices have surged exponentially following sanctions against Russian crude over its war with Ukraine, which resulted in massive pressure on global energy supplies.
The complicated macroeconomic factors have also weighed on US stocks. The S&P 500 recently entered a bear market territory after plunging more than 20% from its January high, as the narrative of further rate hikes has left investors anxious about a possible economic recession.
Morgan Stanley has warned that stocks could possibly dip another 10% before reaching a bottom, and cautioned a recession has become significantly more likely.
On the other hand, Powell has said the Fed isn’t provoking a recession, but it is certainly a possibility. The central banker did try to calm investors by vowing to fight inflation, stressing his commitment to the job is “unconditional.”
But according to Minerd, instability in the global stock market is unlikely to sway the Fed until things escalate out of control. “The Fed and the central banks are going to press on this until they break something,” he said.
