Markets price a global return to tighter money

Markets shifted from expecting easier policy toward broader tightening risk as strong US jobs data, firm inflation, and energy shocks pushed rate expectations higher. The repricing began with geopolitical energy risk but spread across currencies, equities, credit, and growth expectations.

Risk appetite weakened as technology shares and bitcoin sold off, Asian currencies came under pressure, and investors hedged crowded positions. Investors increasingly focused on liquidity protection, from private-credit withdrawal limits to debt strategies built for AI-related refinancing stress.