Many investors believe that the record or near record asset valuations we have seen are in a large part a result of unprecedented monetary policy and by central banks response to the Covid-19 pandemic, which included zero or negative interest rates and massive money printing. However, a lot has changed since early 2020, especially in the US since the economy recovered quickly and became overheated as a result of record stimulus. The majority of the data appears to be inflationary – demand is strong, business confidence is at the highest level in 2 decades, inflation in nearly 4 decades and unemployment claims lowest on record. All these factors combined have raised expectations for a significant change from the US central bank which is also due to discuss it's forward outlook and projections and could have a significant impact on market sentiment as well as other central bank decisions. A below expected QE reduction and no mention of a rate cut could potentially boost riskier assets as investors may continue to benefit from the ongoing central bank support. On the other hand, if the FED were to be more hawkish, we could see a readjusting of the market as capital flows are managed and investments are reassessed.
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![Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges](https://www.fxmag.com/media/cache/article_small_filter/uploads/articles/2022-FXMAG-COM/GPWA/gpw-s-analytical-coverage-support-programme-wse-2-6311cd4191809-2022-09-02-11-30-41-63175bda84812-2022-09-06-16-40-26.png "Warsaw Stock Exchange: Brand24 (B24) - 1Q23 financial results")
