Q3 2022 was a quarter of two halves: positive at first for world markets but with falls in the second half that erased earlier gains. It was optimism that the US Federal Reserve might moderate its rate rising cycle that fuelled gains earlier in the quarter, although this optimism later soured in the face of more persistently high inflation and continued central bank hawkishness. A speech by US Federal Reserve Chairman Powell in late August reinforced messaging around the Fed’s determination to continue to raise rates to reduce inflation. They delivered on this promise with a 75bpts hike in September (this followed a 75bpts increase in July) coupled with quantitative tightening to the tune of $95bn per month beginning in September. Markets fell off strongly from the latter part of August and continued their rout through September.

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