Investors expect the Federal Reserve to move much more aggressively with hiking interest rates in the coming months as inflation rises to multidecade highs.
The Bank of England has warned that inflation could hit 8 per cent by as early as next month in Britain as it raised interest rates to pre-pandemic levels on Thursday.
Oil prices soared and investors shifted more money into ultra-safe U.S. government bonds as Russia stepped up its war on Ukraine. The price of oil surged back above $100 a barrel after Russia, a major energy producer, faced further isolation and economic damage because of its invasion of Ukraine.
In 1974 when Vice President Gerald Ford succeeded to the presidency after Richard Nixon resigned, the country was in a bad economic crisis. The Arab oil shocks of 1973 led to a 300% increase in the price of oil, which translated into inflation of more than 12%.
When debt grows so much that people don’t believe the Treasury will pay it, they sell their bonds and buy other things, sending prices through the roof.
