Stock market crash! Are we heading for meltdown as inflation spikes?
As US inflation spikes to 5%, fears of a stock market crash are growing again. The last decade of rising share prices has been fuelled by easy money and low interest rates, but rising inflation could put a stop to both of those.
If the US Federal Reserve and Bank of England are forced to rein in stimulus and increase borrowing costs to stop the economy from overheating, markets could take a beating.
A stock market crash may seem far off with the FTSE 100 rebounding almost 40% since last year’s crash in March, to consolidate above 7,000. In the US, the S&P 500 broke through 4,000 for the first time ever in April, and has ploughed on to 4,239. However, as we saw last year, things can quickly change.
There’s never been a time when somebody isn’t worrying about a potential stock market crash. People have been predicting them pretty much constantly since the financial crisis. The extreme monetary measures politicians and central bankers adopted in 2008 and 2009 are partly to blame.
Nobody can predict the next stock …
More on: uk.finance.yahoo.com