Market Volatility Could Increase

 

Both stock market and bond market volatility is bound to increase, according to Wolfteam Ltd.'s projections and estimates.

Inflation guessing is a wild card at the moment, as the tensions between Iran and Israel could easily increase.

Inflation is stated as currently the leading metric the Federal Reserve follows. The Federal Reserve, USA's central bank is the leading central bank globally, as the USD is the leading global reserve currency. The Federal Reserve interest rate levels actions are followed closely and usually emulated the world over. 

The Federal Reserve ended 2023 by forecasting 3 or 4 four cuts of the Federal Funds Rate target. Now both Federal Reserve officials and market participants imply the lowering of the interest rates levels targets by the Federal Reserve might be 2 or 1 or even none, whatsoever.

These expectations for volatility is yet to manifest themselves on the markets for stocks, bonds, foreign exchange and commodities and the associated derivatives. The worst kind of trigger could be difficulties for a major bank, which could translate into a credit crunch and huge downside financial market volatility and ultimately plunge the global economy into a recession, much as in the Great Recession in 2008 - 2009.

Much depends on the path of inflation.