August saw another round of central bank rate rises across several economies. Although the US didn’t have a policy meeting, a speech by US Federal Reserve Chairman Powell in late August reinforced messaging around the Fed’s determination to continue to raise rates to reduce inflation. Inflation did show signs of slowing in the US, although it continued to tick up elsewhere as further Nord Stream gas pipeline disruptions by Russia pushed gas prices towards all-time highs in Europe. A trip by U.S. House Speaker Nancy Pelosi to Taiwan raised geopolitical friction between the US and China, but was largely eclipsed by inflation, rates and gas price worries by the end of the month. Higher interest rate expectations resulted in rising bond yields and falling prices, thus negative returns for bond investors. It also impacted on equities as the possibility of a recession loomed nearer.

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