Global recession fears loom over markets; easyJet cuts more flights – business live

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Fears of a possible global recession weigh over global stock markets today, as economic data sours and inflation continued to climb.

Last week, stock markets posted their biggest percentage decline in two years, as investors worry that global central banks will push economies into recession as they try to subdue rising prices.

And there’s no argument that economies are losing pace.

Joe Biden’s treasury secretary Janet Yellen says she expects “the economy to slow” but continued insisting that a full-blown recession is not “at all inevitable”.

Yellen told ABC’s This Week host George Stephanopoulous that her financial outlook results from how the economy has “been growing at a very rapid rate, as the economy, as the labor market, has recovered and we have reached full employment”.

“It’s natural now that we expect a transition to steady and stable growth, but I don’t think a recession is at all inevitable.”

Some Asia-Pacific markets are racking up further losses today, with Japan’s Nikkei dropping another 1% and South Korea’s KOSPI tumbling 2.4%.

That takes global markets further into a bear market (more than 20% off their recent peak).

Hebe Chen, market analyst at IG, says that everyone is talking about a recession now, but the official definition of ‘two consecutive quarters of decline’ may sound pale and dry:

Chen explains:

The market last week just painted a typical recession picture that ticked almost all the boxes: inflation is flying to the roof, interest rates are non-stop rising, two major US stock indices [S&P 500 and Nasdaq] are trapped in the bear market (with the 3rd one on the way) and investors are selling shares of the best companies.

Last but not least, commodity prices start to drop.

Stocks slumped last week as the US Federal Reserve announced its biggest interest rate rise in 15 years, the Bank of England raised rates to a 15-year high, and Switzerland made a surprise rate hike.

Despite this market turbulence, central bankers continue to signal that they will squeeze price pressures out of their economies.

Federal Reserve Governor Christopher Waller on Saturday vowed to pursue a whatever-it-takes approach to fighting inflation, signalling that the Fed could repeat last week’s three-quarter-point rate hike next month.

“If the data comes in as I expect, I will support a similar-sized move at our July meeting,” Waller told a Society for Computational Economics conference in Dallas.

“The Fed is ‘all in’ on re-establishing price stability.”

The crypto crash continued over the weekend, with Bitcoin tumbling below $20,000 on Saturday before a Sunday rebound., which still left it 70% down from its record highs

Also coming up today:

Wall Street will be closed as America celebrates Juneteenth National Independence Day.

We’ll hear from Bank of England policymaker Catherine Mann, when she gives a speech on ‘Monetary Policy in the Global Context’ to an event run by MNI Market News.

Fellow Monetary Policy Committee member Jonathan Haskel is giving the keynote speech at TechUK Policy Leadership Conference.

Mann and Haskel both wanted to raise UK interest rates from 1% to 1.5% last week, while the majority of MPC members pushed for a smaller rise to 1.25%. With other central banks also tightening policy hard, some economists think the BoE could plump for a 50bp hike in August.

The agenda