Making sense of the global rout
It is too early to say whether the recent tumble is just a bull market correction or something deeper
The global equity markets have behaved like a petulant drug addict who has been denied his daily fix of easy money. The prospect of monetary policy normalization in the US has pulled down share prices at a time when the global economy is in the early stages of the strongest synchronized expansion since the financial crisis. This paradox of a sharp market correction in the midst of an economic expansion underlines the influence that extraordinary monetary policy has had on asset prices over the past decade.