Equity markets plunged and financial market volatility spiked at the start of August.
A host of factors—including a worsening tech stock correction, surprise BoJ actions, Fed-speak, US recession fears, rising geopolitical risks, and thin summer trading—collided to create several days of financial market turmoil.
Was this a negative overreaction to a confluence of loosely related events or a flashpoint for worse things to come? We think this may be what a soft landing looks like.
Follow our ongoing coverage: track timelines, understand key drivers, review new forecasts, and discover risks and probable outcomes ahead.
Equity markets plunged and financial market volatility spiked at the start of August.
A host of factors—including a worsening tech stock correction, surprise BoJ actions, Fed-speak, US recession fears, rising geopolitical risks, and thin summer trading—collided to create several days of financial market turmoil.
Was this a negative overreaction to a confluence of loosely related events or a flashpoint for worse things to come? We think this may be what a soft landing looks like.
Follow our ongoing coverage: track timelines, understand key drivers, review new forecasts, and discover risks and probable outcomes ahead.
Updated August 12, 2024
Blip or Signal?
Trusted Insights for What’s Ahead®™
- The burst of equity market volatility that led to a financial market meltdown in early August was caused by a variety of largely unrelated factors converging at a time of great uncertainty for investors.
- A decline in potentially overvalued tech stocks appears to have been accelerated by a cacophony of troubling news about regional conflicts and political unrest across the globe, unexpected soundings and actions by central banks, and mixed readings on US economic data.
- Incoming US data likely will reveal slower economic activity over the balance of this year consistent with a meaningful period of ultrarestrictive Fed monetary policy in reaction to several years of elevated inflation.
- However, fears of an impending US recession are likely overdone given limited information to date suggesting th
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