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30% a week later. Why it matters: When traders pull out of the Official Woke Up And Chose Violence Shirt What’s more,I will buy this market because they think conditions are too murky, and money dries up, it only sets the stage for bigger swings, since there are fewer prospective buyers and sellers. “[It’s] a vicious circle,” Patterson said. Those swings can make it hard for the market to function properly. Traders may get “margin calls” from their brokers or other market players, asking them to insure against growing losses by coughing up more money. If they don’t have the cash, the situation can quickly deteriorate, triggering a chain of unexpected consequences. The European Federation of Energy Traders, a trade group whose members include BP (BP) and Trafigura, recently warned governments and central banks that the market needed emergency support in the face of historic volatility. They said there was a “significant risk” that traders may not have the money to deal with margin calls, which could cause major instability. “It is not infeasible to foresee a situation in which generally sound and healthy energy companies, with significant and valuable asset portfolios, are unable to access cash to meet these unprecedented margin requirements,” they wrote in a letter dated March 8. The Fed hikes interest rates for the first time since 2018 The Federal Reserve slashed interest rates to rock-bottom at the start of the pandemic. Now, for the first time since 2018, it’s starting to hike them again, in a bid to put a lid on the highest inflation in decades. The latest: The Fed lifted its benchmark interest rate by a quarter of a percentage point on Wednesday and indicated that it was prepared to aggressively back away from crisis-era support for the economy, if necessary. Officials forecasted six additional hikes this year. “We feel the economy is very strong and will be able to withstand tighter monetary policy,” Fed Chair Jerome Powell told journalists after the announcement. Stocks rallied
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