What’s driving the fall in financial markets?

Info for members
17 Jun 2022
2 min read

Over the past few days, we’ve seen the Australian share market follow the US with heavy losses due to higher than expected US inflation numbers and the US central bank (the Fed) has raised the cash rate by 0.75%.

Why is inflation so high? 

Inflation has been higher than central banks had envisaged as a result of the war in Ukraine (which has contributed to a sharp rise in energy and food prices) as well as supply issues due to Covid lockdowns.  

What does this mean for financial markets? 

Markets are now anticipating a much more aggressive cycle of central bank interest rate hikes and there are rising fears of a recession.  

As discussed in Chief Investment Officer, John Pearce’s most recent quarterly investment video, we are currently moving through what is typically the most volatile stage of the economic / financial market cycle. We can expect to experience further volatility until central banks (and market participants) are comfortable that inflation is trending downwards, and interest rate tightening expectations have peaked.  

What does this mean for me as a UniSuper member? 

Over the past few days, we’ve received a high number of calls from members worried about their super.  

Falls in markets never feel comfortable, but we note that for most of our members, super is a long-term investment.    

Our team is on hand to help you

If you’re concerned about your super, you may want to chat to one of our super consultants. 

It’ll cost you nothing extra to see us—this service is included as part of your membership. Chat with us on campus, at a UniSuper member centre, or over the phone.

You can also talk to one of our financial advisers

Please note that past performance isn’t an indicator of future performance. The information above is of a general nature and may include general advice. It doesn’t take into account your personal financial situation, needs or objectives. Before making any decision in relation to your UniSuper membership, you should consider your circumstances, the PDS and TMD relevant to you (these are on our website), and whether to consult a qualified financial adviser. 

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