The S & P 500 entered a bear market this week as investors worried that the Fed would speed up tightening to curb inflation, Hong Kong's Wande News Agency reported. At the same time, traditional safe havens such as US Treasuries and gold are also being sold off.

Bond prices fell sharply on Friday and then fell again on Monday and Tuesday, pushing Treasury yields, which rise when prices fall, to their highest level in more than a decade, driven by data showing an increase in consumer prices. On Tuesday, the yield on the benchmark 10-year Treasury note closed at 3.482%, the highest closing price since April 2011.

On the other hand, gold has also been in the doldrums this year, with the rising dollar putting pressure on the price of gold. COMEX gold futures fell 1.2 per cent to $1809.8 an ounce on Tuesday, while COMEX silver futures fell 1.2 per cent to $21 an ounce. Analysts said that given the recent inflation data, the main drag on gold's decline is the expectation that the Fed will be very aggressive on Wednesday's interest rates.

In this context, investors are looking for other "safe havens". BofA's June survey of fund managers showed that institutional investors are bullish on cash, health care, commodities and energy, shorting bonds, discretionary consumer goods, utilities and equities. The survey also showed that 67 fund managers believed that oil would produce the best return in 2022, up from 56 per cent the previous month.

"the mood on Wall Street is bad," said Michael Hartnett and Myung-JeeJung, investment strategists at Bank of America Corporation Securities. Relative to history, inflation will remain high. So, by far, the most popular description of the economic background over the next 12 months is' stagflation'. "

Stagflation can be harmful to the stock market because it is associated with high unemployment, reduced consumer spending, rising costs and reduced corporate profits. Despite soaring inflation, strategists warned of a potential recession, putting pressure on investors.

Bank of America Corporation surveyed 266 chief information officers, asset allocators and portfolio managers in his monthly survey, of which more than 220 used the term "stagflation" to describe their economic expectations for the next 12 months. According to Bank of America Corporation, investors have not been so pessimistic about stagflation since June 2008.

According to Bank of America Corporation, the hawkish Fed also keeps investors "awake at night". 32% of the fund managers surveyed by the bank believe that rising interest rates are the biggest threat to the market. The Fed will discuss raising interest rates at its meeting this week, and analysts at Barclays, Goldman Sachs Group and Jeffery expect rates to rise by 75 basis points for the first time since 1994.

Oil prices have been rising throughout 2021 against the backdrop of an economic rebound, and geopolitical factors in February have further added to the pressure on global energy markets. WTI crude, which was trading around $76 a barrel in early 2022, hit a high above $123 on Tuesday.

Energy stocks have led the market higher this year, driven by rising oil prices, with the S & P 500 up more than 50 per cent, while the S & P 500 has fallen more than 20 per cent so far this year.

Against this backdrop, any other sector in the market needs a dramatic turn to catch up with the energy sector. And, given the performance of global equities and bonds, even if oil prices stagnate this year, it will be hard for investors to find returns elsewhere.

But the Fed's sharp rate hike comes as a growing number of executives are talking about the risks of a recession in the US, and slowing growth could make the outlook for oil demand more challenging. This is a particular concern because some experts believe that the surge in natural gas prices has led to "demand disruption" as oil prices rise.