TOKYO – A bloodbath in US stocks wasn’t high on Asia’s risk list for 2022. But as Wall Street’s stumble pivots from correction to death-dive territory, Asia’s markets are increasingly in harm’s way.
The losses reverberating around the globe indicate that the biggest economy is about to go through a rough patch of unknown proportions. It’s already been through plenty, to name but a few: inflation at 40-year highs; Covid-19 traumatized consumers; a geopolitical minefield sending intensifying headwinds its way; legislative paralysis in Washington; war in Europe; a Federal Reserve behind the inflation curve.
This last riddle — a woeful monetary response — stands out as the US flashes signals that seem ripped from the headlines of 2008 when Lehman Brothers collapsed, setting off the concatenation of events that led to the global financial crisis.