Stocks fell again because of worries about the economy, making the first half of the year the worst on record.

London (Reuters) – Stocks fell again on Thursday, making this the worst first half of the year ever for share prices around the world. Investors are worried that the latest move by the central bank to stop inflation will cause economies to slow down quickly.

This week, the heads of the Federal Reserve, the European Central Bank, and the Bank of England’s central banks got together in Portugal. They reaffirmed their commitment to controlling inflation, no matter how hard it hurts.

Even though the message didn’t say much that wasn’t already known, it was another warning that the era of cheap cash that boosted stock prices for years is coming to an end.

By 7:40 GMT, the MSCI World Equity Index was down 0.48 percent, which meant that it had lost more than 20 percent so far this year, which was the biggest drop since the index was created.

The Euro Stoxx fell by 1.53%, while the German DAX fell by 2.343%. The FTSE 100 in the United Kingdom fell 1.64 percent.

Futures for the U.S. also went down, and there isn’t much evidence yet that the start of a new quarter will bring in bargain hunters. Asset prices have dropped a lot this year, and tech-heavy indexes and stocks that are more sensitive to rising interest rates have led the way.

“The Federal Open Market Committee (FOMC) and Fed Chair Jerome Powell don’t want to get this one wrong. They want to be 90% sure that inflation is going down, not just a little bit “Steve Englander, who is in charge of global G10 FX research at Standard Chartered (OTC: SCBFF), said, “It’s been lanced.”

“So the signals they send get more hawkish when they think the market might be pricing in victory over inflation too soon.”

Global markets in 2022 (source: https://fingfx.thomsonreuters.com/gfx/mkt/xmpjowyqwvr/Pasted%20image%20201656492611136.png).

Traders are now paying attention to the U.S. core price data that is due later in the session and is expected to show how big the inflation problem is.

The Riksbank of Sweden was the latest central bank to raise borrowing costs. It raised its key rate from 0.25 percent to 0.75 percent, as expected, and warned of further tightening to try to keep price growth in check.

The rates at the Hungarian central bank were also raised, by 0.5% to 7.75%.

MSCI’s broadest index of Asia-Pacific stocks outside of Japan fell another 0.5%, bringing its quarterly losses to 10%.

The Nikkei fell 1.4%, but its drop this quarter has only been 5% thanks to a weak yen and the Bank of Japan’s stubborn commitment to super-easy policies.

The need for stimulus was shown by the fact that Japan’s industrial output fell by 7.2% in May, when analysts had expected it to fall by only 0.3%.

A survey that showed a big rise in service activity helped Chinese blue chips rise by 1.6%.

Investors are so worried about a sharp slowdown in the world economy because central banks are tightening their policies that some analysts are willing to predict a second-half rise.

JPMorgan (NYSE:JPM) said in a research note, “It’s not that we think the world and economies are in great shape. It’s just that the average investor expects an economic disaster, and if that doesn’t happen, risky asset classes could make up most of their losses from the first half.“

THE DOLLAR RULES THE WORLD

The risk of a recession was sufficient to reduce 10-year yields in the United States from their recent high of 3.498 percent to 3.06 percent, though this represents an increase of 74 basis points for the quarter and nearly 160 basis points for the year.

The U.S. dollar had its best quarter since late 2016 because of the Fed’s hawkishness and investors’ desire for liquidity in tough times. At 105.01, the dollar index was a little bit lower than it had been, but it was only a hair away from its recent 20-year high of 105.79.

The Riksbank rate hike didn’t have much of an effect on the Swedish crown, which was last worth 10.688 crowns.

The euro inched up to $1.0449. It has lost 5.5 percent so far this quarter and 8 percent so far this year.At 0.9963 Swiss francs, it fell to a new low in 7 and a half years.

Even worse for the Japanese yen, the dollar has risen by more than 12% this quarter and 18% this year to 137, its highest level since 1998.

Oil prices have gone up in 2022, just like the prices of most other commodities. On Thursday, they went down a little bit because of worries that U.S. gasoline demand might slow down more than usual. [O/R]

Even though the U.S. has been pushing for oil quotas to be raised, OPEC and OPEC+ will likely not be able to pump much more oil after their two-day meeting ends on Thursday.

U.S. crude fell 0.8% to $115.33 per barrel, while Brent fell 0.4% to $115.33 per barrel.