Markets Cautious Ahead of US Elections and Fed Meeting as Aviation Sector Fears the Impact of Rising Inflation

Although a relief has been observed in bond markets and interest-rate-sensitive equity sectors following the correction experienced in October, Bank of America strategists advise investors to remain cautious. Strategists argue that risk should be avoided until the upcoming US midterm elections and the next Fed meeting are behind us. Meanwhile in political circles, turmoil in the White House deepens as midterm elections approach; Press Secretary Katie Zacharia was dismissed just five days after taking office.

In the aviation sector, concerns over a prolonged crisis dominate due to rising energy costs fueling inflation. Airline carriers worry that passengers will be unwilling to meet requests for new ticket price hikes as inflation weakens consumers' purchasing power. In contrast to this gloomy picture in commercial aviation, high demand and production delays on the private aviation side are pushing prices up; this situation enables wealthy individuals to generate millions of dollars in profit from buying and selling private jets.

In global financial diplomacy, the US continues to take steps to strengthen its presence in the Chinese market. According to information shared by a US Treasury Department official, during bilateral meetings held in Bangkok this week, the US side conveyed its demands regarding market access in China for Mastercard and Citigroup to Chinese officials, exerting pressure on the matter.

This content is for general information purposes and is not investment advice.