The willingness of major central banks in developed markets to tighten policy further and/or faster to best inflation has resulted in substantial weakness in equities over the past week or so, including a renewed slump today following some short-lived respite after the end of yesterday’s FOMC meeting. And while government bonds have rallied a bit since then, the bigger picture is that they have also suffered recently. A joint sell-off in equities and bonds has been a feature of much of 2022, resulting in a poor performance from a synthetic “60:40” equity/bond portfolio in the US, for example.
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