Thud on Wall Street.
The Dow Jones closed down 2.41% at 29,929.31 points, the Nasdaq dropped 4.08% to 10,646.10 points while the S&P 500 left 3.24% at 3,667.24 points.
A recession "is not inevitable".
This was stated by US President Joe Biden to Associtaed Press, as reported by the Bloomberg agency.
The sigh of relief did not last long.
The Fed's greater squeeze since 1994 and the skepticism of the ECB's anti-spread shield sink the stock markets which, after the rebound on Tuesday, come back under pressure with the resurgence of the specter of recession.
The
European financial markets
closed in sharp decline and saw
233 billion go up in smoke.
In the Old Continent,
Milan is the black jersey,
closing
down 3.32%
and burning over
21 billion.
Behind
Frankfurt
, which lost
3.31%
weighed down by tensions on German government bonds, which grew by 20 basis points, so much so that the
spread between 10-year BTPs and Bunds fell below the psychological quota of 200 points
(up to 196) to then close at 202 points.
French bonds are also under pressure: those at five years have risen by 16 points.
Above all, the markets are nervous about skepticism about the ECB's measures, which are being worked on with many problems to resolve, including that of the power of the new anti-spread shield and the possible conditions for the beneficiary countries.
"They have a plan to develop a plan, but the market wants more details," says Hsbc's Willem Sels.
"It is a good thing that the ECB reacted but there is nothing new", adds Hadege Dufosse of Candriam.
To the doubts about the Eurotower are added the fears of a Fed that is too aggressive.
The historic hike in interest rates of 0.75% to fight a galloping inflation feeds the fear of a recession, now almost taken for granted in the United States where the chances are now given at 72%.
The Bank of England is also adopting a 'hawk' strategy, which has further raised the cost of money by a quarter of a point, warning of a possible price flare above 11% by the end of the year.
The cost of living also pushes the Swiss central bank into action which, surprisingly, raises rates for the first time in 15 years, adjusting the cost of money by 0.50%.
Markets inevitably view this run by central banks towards new straits with concern, fearing its effects on
economy.
Indeed, the rises threaten to stifle the recovery by sliding the global economy into a recession without having the certainty, beyond public proclamations, of being able to win the fight against inflation.
