The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Wednesday with minimal growth, but on Tuesday they managed to decline quite seriously. Thus, on Tuesday, another round of upward correction could be completed within the framework of a new downward trend, which may also be a correction against the global upward trend. So far, everything is going according to plan. Recall that we have repeatedly said that the US stock market (and not only the US), as well as any other risky assets, will be under serious pressure, as monetary policy is being tightened one way or another, but monetary incentives are also being cut, and tomorrow the Fed will start the QT program, which involves a monthly sale of securities from the balance sheet for $ 95 billion. Thus, conditions for stocks will only worsen, and bonds and deposits - will improve. Based on this, we have already concluded that, at least until the end of 2022, US stock indices are highly likely to fall. And we are not changing this forecast yet.

Meanwhile, in the Portuguese city of Sintra, three central bankers - Andrew Bailey, Christine Lagarde, and Jerome Powell - gave speeches at once. First of all, we are interested in Powell's performance. It may not have been too interesting for the foreign exchange market, but it was interesting for the stock market. Powell was more eloquent than usual this time. He once again assured that the Fed will raise rates until inflation returns to the target level. However, he also said that the COVID-2019 epidemic has made serious changes in the global economy and it will be very difficult to achieve the balance that was observed before the pandemic. In principle, this is exactly what we are seeing now. Many indicators of the state of the economy are completely unbalanced. Then inflation is rising, then GDP is falling, demand remains high, unemployment is low, and provokes wage growth. In general, there is little balance in the American economy right now. According to Powell, tightening monetary policy will slow down economic growth slightly, which will balance supply and demand, as well as return to price stability. The head of the Fed also warned that he could not guarantee a "soft landing" for the American economy. According to him, the situation in Ukraine has only aggravated the negative processes that were observed during the pandemic, and now the Fed is forced to act harshly and quickly. However, it is not yet known how, after all the tightening, the US economy will return to normal rates and conditions. Already, many experts declare a very likely recession. It seems that these are not just concerns. Recall that six months ago, few believed that inflation would increase to 40-year highs.