This year's slump in stocks was brought on by a few things, two of which have been sky-high inflationand fading global economic forecasts for the remainder of 2022 and 2023. The two are not mutually exclusive, though. Federal Reserve Chairman Jerome Powell has signaled that the Fed will be raising interest rates throughout the year to cool consumer demand.

The Federal Reserve has implemented interest rate hikes designed to rein in economic growth, partly explaining the muted macroeconomic forecasts. Not by design, however, is the record high inflation that countries around the globe are experiencing. Though inflation softened a bit in July, it has been persistently high this year, which could explain the rest of the pessimistic forecasts.

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Source Fool.com