CFM Indosuez Wealth Management Annual Report 2022 16 / Decrypt and clarify / This abrupt reversal in monetary policy had significant consequences for the financial markets, resulting in a sharp correction on the equity markets, which remain fundamentally sensitive to interest rates. Overall, the main asset classes (equities and bonds) corrected in unison, as did "safe haven" investments such as gold, reducing the appeal of diversification and offering investors few alternatives outside the money market and the dollar. This unexpected scenario also had a structural dimension, leading us to think that we are in fact witnessing a paradigm shift, thus sweeping away a number of certainties. Our energy dependence on Russia has highlighted the vulnerability of our industrial models. In addition, one of the ideas called into question is the concept of lasting peace in Europe, with a certain form of globalisation making way for a search for strategic autonomy. We are also thinking about the new model of capitalism in China, already launched in 2021, calling into question its status as the driver of the global economy. Then there is the idea, validated since autumn 2021, that inflation was temporary and that interest rates would remain at a low level for a long period. Delphine di Pizio Tiger Global Head of Asset Management at CA-Indosuez The year 2022 was marked by a both unexpected and unforeseeable geopolitical scenario. Nothing was there to warn us that the tensions brewing since the invasion of Crimea in 2014 would result in a major conflict at Europe's doorstep. This historical event fully disrupted the economic and financial landscape in 2022, exacerbating the inflationary pressure and the energy crisis already underway since the summer of 2021. The loss of confidence of European investors and consumers reinforced the recessionary trend, which negatively impacted economic activity. In the United States, the persistent inflationary pressure led the US Federal Reserve (Fed) to normalise its monetary policy by raising its key interest rates. With a rate hike of more than 400 basis points (bp) in less than a year, we witnessed the fastest monetary tightening since the 1970s. 2022 review and 2023 financial market outlook
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