The International Monetary Fund warned that against the background of a change in the position of the global Central Bank regarding monetary policy, financial markets may continue to show significant fluctuations.
"Central banks' attempts to curb high inflation through policy tightening may cause stock markets to fall further, even though policymakers promise to tighten policy gradually," said Tobias Adrian, financial adviser to the IMF.
"The reactions of financial markets to such policy changes will depend on how Central Banks communicate their intentions. I hope that Central Banks will try to smooth out the consequences of tightening policy on financial markets in order to prevent an even bigger collapse," he said.
"But if the Fed decides to raise the rate not by 0.25%, but by 0.5% at once, such a move may provoke another sell-off in stock markets, while some sectors may be under even more pressure," Adrian added.
Adrian's comments came after the IMF published its global financial stability report, which reported that despite the rise in rates, corporate profits are projected to exceed the pre-pandemic level in 2022 in most sectors.
The IMF also pointed to side risks for emerging market countries as a result of the normalization of monetary policy in advanced economies.