{"id":547392,"date":"2022-06-20T04:18:15","date_gmt":"2022-06-20T04:18:15","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/06\/20\/the-global-financial-mood-has-well-and-truly-turned\/"},"modified":"2022-06-20T04:18:15","modified_gmt":"2022-06-20T04:18:15","slug":"the-global-financial-mood-has-well-and-truly-turned","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/06\/20\/the-global-financial-mood-has-well-and-truly-turned\/","title":{"rendered":"The global financial mood has well and truly turned"},"content":{"rendered":"

\n <\/a>
\n Time to batten down the hatches: The business press is warning of coming <\/strong\n >storms on all fronts. <\/strong>Investors should prepare for
\n potentially extreme movements in the markets as central banks end years of
\n easy monetary policy to curb inflation, writes James Mackintosh in the
\n Wall Street Journal<\/a\n >. As the US Federal Reserve focuses on fighting inflation, Chairman Jerome
\n Powell said he wouldn\u2019t \u201cdeclare victory\u201d over inflation until it has been
\n falling for months and spoke of the need to figure out which level of interest
\n rates will slow the economy.
\n This likely means that the Fed will continue hiking rates until \u201csomething
\n breaks,\u201d<\/strong\n >
\n Mackintosh writes.\n<\/p>\n

\n Don\u2019t expect any quick fixes: <\/strong>One Fed official yesterday said
\n it could take \u201ca couple of years\u201d for inflation to fall back to the US central
\n bank\u2019s 2% target, the
\n Financial Times<\/a\n >
\n reports.\n<\/p>\n

\n This is more than just a strategy shift \u2014 its a sea change for policy: <\/strong\n >The Fed\u2019s move to hike rates marks an end to decades of easy money policy
\n ready to back the markets whenever they wobbled, the
\n Washington Post<\/a\n >
\n says, heralding the start of tougher times ahead for almost every asset class
\n and corner of the economy.\n<\/p>\n

\n And it\u2019s not just VCs who are bunkering down for the nuclear winter:
\n Private equity giants are getting nervous, too<\/strong\n >, as the cheap borrowing used by the industry to fund a transactions spree
\n over the past two years comes to an end, the
\n Financial Times<\/a\n >
\n reports. New buyout funds are now struggling to find new cash, while listed
\n firms have seen their share prices fall heavily since November.
\n \u201cThis is a time of reckoning for our industry,\u201d<\/strong> said Phillip
\n Freise, co-head of European PE at KKR.\n<\/p>\n

\n None of this bodes well for stock markets: <\/strong>IPOs are on track
\n for the weakest first half since 2005, according to data compiled by
\n Bloomberg<\/a\n >, which counts just USD 198 bn worth of IPOs and follow-on sales raised so
\n far this year.\n<\/p>\n

\n On the bright side: Many see M&A activity continuing in earnest despite
\n fears of a <\/strong\n >recession<\/strong> because companies cannot afford to ignore
\n disruptions in their industries from new technologies, experts at one of Wall
\n Street\u2019s top investment banks, Centerview, tell the
\n Financial Times<\/a\n >. Centerview expects M&A activity this year to match the record USD 4 tn
\n achieved in 2021, as companies look to add new, innovative products and
\n services to their portfolio to stay ahead of the competition, representatives
\n from the bank tell the salmon-colored paper. Global M&A volumes hit USD 1.88
\n tn in the first five months of the year, down from USD 2.92 tn in 2021 but
\n still above pre-pandemic levels of USD 1.57 tn, Refinitiv data shows.\n<\/p>\n

Also worth noting:<\/strong><\/p>\n