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Why Do Stocks Suffer When Interest Rates Rise?
The majority of 2022 has proved to be a difficult environment for risk assets. US stock markets, led by the Nasdaq 100, were down around -30% year-to-date (if not more). The finger pointing to assign blame has been intense. It’s because of the Federal Reserve’s missteps on inflation; or the Russian invasion of Ukraine. Or China’s zero-COVID strategy, upending the global supply chain; or the massive fiscal spending undertaken during the early months of the pandemic. The truth of the matter is that, while narratives are abundant, the root cause is fairly simple, if not common from a macro fundamental perspective: ... (full story)