Valuations may also go down because the future value of cashflows is lower when a higher discount rate is used. For fixed income markets, there is an inverse relationship between interest rates and bond prices: as interest rates rise, bond prices generally fall. This is why both stock and bond markets have struggled in 2022 as the central banks have raised rates. Is a “Soft Landing” Possible? At the time of writing, labour markets and productivity continue to be stable, so some believe that we may avoid a full-blown recession and achieve a soft landing.

Source: Forbes October 12, 2022 21:37 UTC