Financial Markets Not A One-Way Bet In 2022

• Financial markets will face a greater set of challenges as the economic cycle matures and new risks emerge. These include much higher uncertainty regarding the trajectory of monetary policy, rich valuations, slowing economic and earnings growth, as well as political risk emanating from the US midterm elections in November 2022.
• US equity markets were notably less volatile in 2021 than in recent years, so even a return to the pre-crisis level of volatility could come as a bit of a shock. 
• Fitch expects the US dollar to remain on the front foot and for commodity prices to ease, which could weigh on emerging market currencies.

 (Source: Fitch Solutions)