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Jeff Bezos, Elon Musk and Mark Zuckerberg lose billions


The world’s richest men suffered dents to their net price after stocks had their worst day in two years on Tuesday.

Jeff Bezos’ wealth plunged by $9.8 billion and Elon Musk net price dropped by $8.4 billion. Musk stays the world’s richest man with a net price of $256 billion, in keeping with Bloomberg’s Billionaire Index. Bezos is second at $150 billion.

The wealth of Mark Zuckerberg, Larry Page, Sergey Brin and Steve Ballmer all declined by greater than $4 billion, while Warren Buffett and Bill Gates lost $3.4 billion and $2.8 billion, respectively.

The stock market cratered after the discharge of the discharge of Consumer Price Inflation, which dropped barely in August to eight.3% from 8.5% in July, the Labor Department said Tuesday.

Elon Musk’s net price dropping by $8.4 billion after Tuesday’s stock market plunge.

Getty Images

Nonetheless, CPI rose 0.1% on a monthly comparison in August, after holding flat in July, in keeping with government data Tuesday, a disappointing result amid widespread expectations that inflation would fall within the month.

The stock market immediately plunged on the news and the US dollar shot higher as data showed that US inflation slowed lower than expected.

The Dow Jones Industrial Average fell nearly 1,300 points Tuesday because the news triggered a rout on the Recent York Stock Exchange. Tech stocks were savaged, dropping by greater than 500 points, or 4.4%.

The value of bitcoin was also battered, dropping 7.34% to $20,161. The crypto is down 41 per cent for the past six months.

The value of ethereum plunged 4% to $2389 and has shed 30% this 12 months.

Biden reacts to inflation report

President Biden struck a positive tone, saying the information showed progress in fighting inflation.

“This month, prices overall were essentially flat, gas prices were down, and wages were up – that’s excellent news for American families.”

Nonetheless, he acknowledged “it would take more time and resolve to bring inflation down.”

Mark ZuckerbergThe wealth of Mark Zuckerberg, Larry Page, Sergey Brin and Steve Ballmer all declined by greater than $4 billion.Anadolu Agency via Getty Images

Fed to hike rates aggressively

But markets reacted negatively to the news that inflation was falling at a slower pace than economists had expected.

The surprise result means it’s increasingly likely the Federal Reserve will hike rates of interest aggressively.

Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, told the Recent York Post: “Inflation is the issue, but the important thing lies with the labor market.

“So long as unemployment is amazingly low and consumers are confident of their spending, it’s hard to assume a scenario where the inflation problem resolves itself.”

He indicated the Fed would want to make unpopular decisions as a way to get prices under control.

“The Fed has the worst problem on this planet — it’s a political problem, not an economic problem — and the one cure for the present crisis is one which is politically infeasible,” Zaccarelli said.

“If the Fed thought they were criticized an excessive amount of by the previous administration (they usually were), wait until they see the kind of criticism they will likely be under as they deliberately create an economic scenario where unemployment jumps significantly.”

Jeff BezosInflation is hitting Amazon founder Bezos’ wallet.AFP via Getty Images

‘Substantially hotter than expected

“Each headline and core US CPI were substantially hotter than expected in August,” Monex market analyst Jay Zhao-Murray said.

He added that this was “leading currency and stuck income markets to embark on a swift and dramatic reversal from recent price motion, where traders and investors had largely positioned themselves for a softer inflation print”.

He pointed to core inflation that excludes volatile energy and food prices, which is what Fed policymakers pay particular attention to. This rose by 0.6 percentage points month-on-month, in comparison with a 0.3-point gain in July.

While markets were already largely pricing in one other 75-basis-point rate of interest hike by the Fed at its next meeting, there had been hopes that passing the inflation peak would allow the Fed to relent.

Nonetheless, the inflation figures were “hotter than expected in August and put a chill on among the peak inflation/peak hawkishness/soft landing chatter”, Briefing.com analyst Patrick O’Hare said.

Stocks, which had rebounded in recent days on hopes that a peak in inflation would allow a rapid end to hawkish rate hikes and thus avoid a recession and attain a “soft” landing of the economy, abruptly turned lower.

World reacts to bad inflation news

Fed boss Jerome Powell has indicated the speed increases would proceed until inflation is tamed.

Zhao-Murray said market expectations regarding the Fed’s next rate hike had hardened following the inflation data.

While some were forecasting the chance the Fed would drop to a half-percentage-point hike, now a 0.75-point increase is seen as the ground and a few are forecasting a one-point hike.

Market analyst Michael Hewson said Tuesday’s core inflation figures mean more aggressive rate hikes will likely be needed to tame rising prices.

“While the narrative of peak inflation could be still valid, getting it down from these levels is more likely to be a much tougher battle,” he said.

Inflation has soared across the globe this 12 months owing to sky-high energy and food bills.

This has been caused to a big extent by supply constraints after economies reopened from pandemic lockdowns and within the wake of Russia’s invasion of Ukraine.

The dollar has soared because the Federal Reserve moved earlier and more aggressively than other central banks to boost rates of interest and contain inflation.

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