For Berenberg, investors are facing a new era because “the era of liquidity is over, at least for now.” According to his analysis, stock markets have benefited since the 2008-2009 financial crisis from all the measures taken by the Federal Reserve (Fed) and the European Central Bank (ECB) to increase liquidity and stimulate the economy.
However, these two entities have been forced to turn off the tap due to high inflation caused by the Covid-19 pandemic, which is being further fueled by the war in Ukraine. As a result, investors face “serious real-time risks from inflation, supply disruptions, the conflict between Russia and Ukraine, and growing concerns about growth or recession.”
