(Bloomberg) -- A key index of equities from around the world officially slipped into a bear market, unable to withstand the weight of accelerating inflation that traders expect will keep major central banks restrictive, dragging on global growth.
The MSCI ACWI Index, which contains stocks from both emerging and developed markets, extended its decline from its mid-November peak to 21% on Monday to 597.64. In dropping more than 20%, it follows the S&P 500 Index into a bear market.
Caution in markets drove money managers toward havens such as the dollar as investors pared their appetite for risk. That comes after US inflation accelerated to a fresh 40-year high last month, a sign that price pressures are becoming entrenched in the economy.
That will likely push the Federal Reserve to extend an aggressive series of interest-rate hikes. Money markets are now seeing the terminal rate at around 4% for the first time this cycle, and are pricing for it to get there by the middle of next year.
Read more: Wall Street Floats 100 Basis-Point Fed Hike as Inflation Stings
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
