Investors worldwide are getting worried ahead of the Federal Reserve's meeting because of the recent appearance of inflation statistics from Australia and monetary tightening in Singapore. Nearly US$3 trillion in global stock valuations vanished before the US benchmark index finished in the green zone, according to Bloomberg on Tuesday (1/25/2022). Consumer prices have pushed Australia's three-year bond rates to their highest level since April 2019. When inflation hit its most significant level for eight years, Singapore's Central Bank took action. This action resulted in the Singapore dollar strengthening.
Before the Fed's meeting on Wednesday, money market participants had expressed similar concerns about the current state of the economy. Interest rates will rise due to an announcement from the Federal Reserve Board. It is predicted that US Treasury and technology stock prices will plummet. "Investors have been overly sensitive in the last week, and recent events haven't helped ease market uncertainty about when and how much the Fed would raise interest rates. Even if the Federal Reserve is affecting everything, the market is still in a perilous moment, "Head of Research at K2 Asset Management in Melbourne, George Boubouras, stated. Even as US equity futures resumed their decline on the day, following Monday's dramatic swing and Asian stocks falling to their lowest level in 13 months, investors were still jittery. The value of US Treasuries grew in tandem with the Japanese yen, which attracted investors.
The Monetary Authority of Singapore (MAS) unexpected tightened the monetary policy, which usually conducts policy reviews in April and October twice a year. The tightening was done to prevent inflation from growing. Central banks will use FX as a primary policy tool to combat rising import costs and allow their cu