Wall Street braces for a 'bumpy' 2023 after worst year since 2008

Amid the impact of increased interest rates executed by the US Feds earlier this year, Wall Street in New York concluded its worst year since 2008 on December 30.The S&P 500, a key US stock index, fell 19.4 per cent in 2022 as policy effects to fight inflation gave rise to increased interest rates by Federal Reserve bodies around the world.Nasdaq 100, another important stock index dropped 33 per cent in 2022.

Bonds in the US market lost 16 per cent of their value, the biggest decline since at least 1990. This was also because of the same reason; increased interest rates by the central banks to slow rising consumer prices.

It was the worst year in more than a decade for global equities and bonds—but it’s finally over, said a Bloomberg report.

'2023 to be a bumpy ride'

Experts cited in the US media say that the post-pandemic 2022 experience will give a "rearview mirror" perspective to buyers and investors in 2023.

"The good news is that we will soon put the year in the rearview mirror,” Art Hogan, chief market strategist at Los Angeles-based B. Riley Wealth, told Bloomberg.

"The bad news is that 2023 could be a bumpy ride, at least for the first few months," he added.

As the U.S. economy heads toward a possible recession, the Federal Reserve may raise interest rates further.Higher interest rates are central banks’ primary tool for controllinginflation.

When rates rise, borrowing costs also increase, slowing demand in the economy and in theory tempering further price increases.

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