Bloomberg Asharq hosted Naji Nehme, Chief Investment Officer at Petiole Asset Management AG, to discuss market fear as we enter a new phase for interest rates and inflation. Below are the highlights of the interview:
- Markets are experiencing fear today as we transition to a new phase of rising interest rates and inflation, which leads investors to seek new ways to adapt to this phase.
- Signs of economic recovery appeared when the threat of Covid-19 receded, but the latest lockdowns in China and geopolitical risks affected this recovery negatively.
- The Federal Reserve is determined to control inflation and is planning to raise interest rates at least 0.5% in June.
- We see no signs of a recession or bear market yet, and treasury bond spreads haven’t expanded enough to signal a recession.
- Early warnings of a market recession appear about six months before it actually happens and affects economies. What is happening in markets today is due to the fear of recession.