2008-2022: The end of an era, and the beginning of another

Worst year in two decades

Markets have sustained significant losses in the past few weeks as a result of persisting inflation forcing central banks to hike interest rates sharply higher.

Global stocks are now 22% below their December highs and global investment-grade bonds are 19.6%. Volatility is significant and consistent with times of crisis. As a result, global portfolios are experiencing their worst year in at least two decades. Until one year ago, inflation had been absent for two decades. Then, in 2021 it unexpectedly rose. This was seen as mostly the result of Covid-19 lockdowns ending abruptly and disrupting supply chains. Leading it to be dismissed as transitory. A few months of high inflation could not, in theory, change the mindset of consumers who had forgot...