Experts at the New York Post (NYP) affirm that recent policy moves of the Federal Reserve are setting the stage for a financial crisis in American stock markets. Analysts consider these measures inefficient and suppose that the US central bank has not been able to resolve the fallout of the crisis entailed by the COVID-19 pandemic.
Analysts conclude that the US stock market will go through a tough challenge. Wall Street analysts highlight persistent market jitters that force large market players and firms to quit.
Experts have also found out a significant contraction in the volume of traditional IPOs (an initial public offering of shares on a stock exchange). Another bad omen is that major investment firms are likely to fire redundant personnel. Analysts warn that a lot of indebted companies are about to declare bankruptcy and begin selling their property.
Earlier, Jared Bernstein, a member of the White House Council of Economic Advisers and an economic adviser to Joe Biden, underscores the importance of the joint counter-measures against soaring inflation by the government and the monetary authorities. The annual rate of the US CPI slipped to 8.3% in August, a bit less than expected.
In early May 2022, the Federal Reserve decided on scaling down its massive balance sheet. In the spring 2022, the central bank embarked on a cycle of aggressive monetary tightening with regular rate hikes. These measures were taken to tame rampant inflation and stabilize monetary policy. During the COVID-19 pandemic, the regulator conducted ultra-loose monetary policy to pump up financial markets with massive liquidity.