Is this a correction, or the start of something more meaningful, asks the RBC Harbour Group. The peak to trough decline of this volatility episode is just over four per cent for the S&P 500 and six per cent for the TSX, with the latter more influenced by the steep drop in oil prices. And while it is much too early to determine what the economic impact of Omicron will be, it says talk of higher interest rates also tends to dampen enthusiasm. It believes central bankers taking action to keep inflation in check is worth any short-term discomfort, as the costs of letting inflation get out of hand are higher and the pain inflicted to deal with it at a later stage much greater. From the evidence, it says this feels like typical market volatility ??? the type endured once a year or more ??? and distinctly different than the damage imposed on portfolios during a U.S. recession.
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