Investors found few, if any, safe havens in 2022, as central banks in the United States and around the globe raised interest rates for the first time in years to fight surging inflation, stoking fear of a global recession.
Consumers paid more for energy, food and just about everything else. Borrowing to buy a home or a car also got costlier.
On Wall Street, the benchmark S&P 500 index fell into a bear market by dropping more than 20 percent from the record high set in early January. The energy sector was the lone winner, while technology stocks tumbled.
A rout in the bond market was particularly painful turn for fixed-income investors. Cryptocurrency investors weren’t spared either.
Inflation and the Fed
By Chris RugaberCentral banks’ response to inflation overshadowed financial markets in 2022 and could very well do so again next year. The Federal Reserve started raising rates in March, and would eventually raise rates seven times by a total of 4.25 percentage points.
The Bear Roars
By Stan ChoeWall Street’s brutal year left few stocks unscathed, and the vast majority fell into a bear market under the weight of fast-rising interest rates.
Bond Market Blues
By Stan ChoeIt was one of the worst years ever for bond investors.
Decades-high inflation meant the fixed payments coming from bonds in the future won’t buy as many groceries, gallons of gasoline or whatever else is rising in price. The Fed’s decision to raise interest rates also hammered bond prices.
Housing Market Slumps
By Alex VeigaAs 2022 began, the average rate on a 30-year mortgage was slightly above 3 percent, near historic lows. By October, the average rate on that 30-year home loan had soared above 7 percent, a 20-year high.
Is Tesla on Autopilot?
By Tom KrisherYou can’t blame Tesla shareholders for feeling jilted. With CEO Elon Musk’s focus diverted by his acquisition of Twitter, Tesla shares lost more than half their value.
Consumers Feel the Pinch
By Cora LewisThe highest inflation in four decades is hitting consumers right in their wallets.
Households coping with higher prices are likely depleting savings built up during the pandemic. Wages went up, although not at the same pace as inflation. Credit card debt ballooned, and rents increased.
Ukraine War Impact
Russia’s invasion of Ukraine in February sent prices soaring for the commodities the world runs on: oil, natural gas, and wheat.European prices for natural gas rose to 17 times their prewar levels after Russia choked off most supplies over the war. Global oil prices spiked as Western buyers shunned Moscow’s crude, sending Brent to over $120 per barrel in May. Record wheat prices spurred disastrous food inflation in poor countries.
China Ditches Zero COVID
By Joe McDonaldChina’s economic growth and stock market slid in 2022 under pressure from pandemic controls and corporate debt.
The world’s second-largest economy shrank by 2.6 percent in the three months ending in June compared with the previous quarter after Shanghai and other industrial centers shut down to fight outbreaks. Forecasters say annual growth might fall below 3 percent, among the lowest in decades.
Crypto’s Wild Ride
By Ken SweetThe year began with bitcoin above $45,000 and the crypto industry making further inroads among politicians and mainstream financial institutions. As 2022 ends, bitcoin is below $17,000 and the industry is reeling from another crisis.
The Streaming Wars
By Damian TroiseNetflix, Warner Bros. Discovery and other big entertainment companies tumbled in 2022 as streaming services struggled amid increased competition and rising inflation stifled advertising spending.
Consumers who'd been cooped up during the pandemic went out and turned off their streaming services. The sheer number of streaming options also left companies in a fierce fight for viewers’ attention.
