Since peaking in 2021, global bonds have suffered phenomenal losses in 2022. Talks of inflation seem to be resurfacing louder than during the pandemic years with the U.S. Federal Reserve and EU Central Bank talking about tightening policy to combat inflation.
Famous billionaire investor Carl Ichan is also worried about the developments and is protecting his portfolio against a possible sell-off in the market. “I think there very well could be a recession or even worse,” Ichan said on the Closing Bell Overtime on CNBC.
Recession indicators flashing
The U.S. Fed recently stated that they are about to embark on a more aggressive cycle of interest-rate hikes. This statement has led the 10-year yields to surge to 2.5% bursting through a ceiling level it had held since the 1980s.
Europe’s Stoxx 600 advanced while the S&P 500 and Nasdaq 100 contracted with investors keeping an eye on Russia’s war in Ukraine. The picture painted by these developments is one of a pause in the stock rally from war-induced lows.