LONDON—World stocks slumped on Monday as the growing risk of more aggressive interest rate hikes in the United States and Europe inflicted fresh pain on bond markets and pushed the dollar to new 20-year highs, just as recession fears mount.
Federal Reserve Chair Jerome Powell, speaking at the Jackson Hole symposium on Friday, said the Fed would raise rates as high as needed to restrict growth, and keep them there “for some time” to bring down inflation running well above its 2 percent target.
European Central Bank board member Isabel Schnabel added to market unease. She warned on Saturday that central banks risk losing public trust and must act forcefully to curb inflation, even if that drags their economies into a recession….