April 2022: No laughing matter

April 2022: No laughing matter

12 May 2022 | 2 min. readingtime


April 2022: No laughing matter (pdf, Dutch)

The financial markets have been no laughing matter for investors, neither on 1 April nor during the rest of the month. Almost all asset classes performed poorly in April. Hit by rising interest rates and inflation, bonds fell by 3.8%, and corporate bonds by 2.7%.


Equities suffered from a combination of worsening economic prospects, rising inflation and a tightening of monetary policy. The latter development is particularly problematic for US equities, considering the multiple US Fed rate hikes in store for the coming months. At 5.7% European property also fared badly, mainly because long-term interest rates went up.

What also stood out was the euro’s strong depreciation against the US dollar. This development was in part fuelled by the expectation that the Fed will hike its policy rate more and faster in the months ahead than the ECB will. Another influencing factor are the higher prices of raw materials. Many raw materials are traded in US dollar and a higher price means that buyers need more dollars for one unit of materials.

IMF also foresees lower growth and higher inflation

The gloomier picture painted by the financial markets is also shared by the IMF. The IMF recently published its World Economic Outlook (WEO) report. Compared with the previous WEO report (of January), the IMF has revised its world economic growth estimates for 2022 and 2023 downwards and its inflation estimates upwards.

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Raphie Hayat

Senior investment strategist

Raphie has a PhD in economic sciences and is an investment strategist at a.s.r. vermogensbeheer who writes about the interface between macroeconomics and financial markets.

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