Wall Street woes build after Russia invades Ukraine

Susan Tompor | Detroit Free Press | February 24th, 2022

Will we still see higher interest rates ahead?

Rate hikes remain likely, he said, because inflation remains a large challenge for the U.S. economy.

Sam G. Huszczo, a chartered financial analyst in Southfield, blames much of the market fallout lately on concerns about inflation, instead of political upheaval in Eastern Europe.

“More and more investors are coming to the conclusion the Fed needs to move faster on combating inflation, creating expectations of even more rate hikes for 2022,” Huszczo said.

“Our question is how many rate hikes are currently baked into the markets,” he said.

“We see four rate hikes as highly likely and even as many as seven rate hikes by the end of 2022,” Huszczo said.

Is virtual currency a safer spot than stocks?

Not really.

Gold prices are up, but cryptocurrency prices plunged in light of the Russian invasion.

“From what we’ve seen so far crypto is not the inflation hedge or political risk hedge enthusiasts have hoped it would be,” Huszczo said.

Instead, he said, the downward trend for virtual currency values in recent months have closely mirrored movements of the S&P 500.

“This could be an ancillary effect of crypto becoming more mainstream and losing a little bit of what made it special to begin with,” he said.

“I am still curious how long Bitcoin enthusiasts could hold on if we had a more prolonged economic recession. If people are put in a position to have to sell assets to pay bills, which will they sell first: their S&P 500 Index or Bitcoin? We are not quite at that true test yet.”