The two nightmares facing investors

Rising inflation and weaker earnings suggest markets are set for a spell of toil and trouble, says Philip Pilkington.

US stock information
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Even before the outbreak of war last week, investors were getting rattled. Inflation is here to stay and markets are rightly concerned that 2022 will see the first in a series of US central-bank interest-rate rises.

How many rises do the markets fear? It depends on what day you ask them. When the clock struck 12 on New Year’s Eve, the markets were expecting two or three rate rises in 2022. At the time of writing, they are expecting six or seven.

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Philip Pilkington is a macroeconomist and investment professional. He is the author of the book The Reformation in Economics, and blogs at Fixing the Economists and on Twitter @philippilk