Powell’s 8-minute speech wiped $78 billion from wealthiest Americans

In just eight minutes, the chairman of the Federal Reserve Bank of the USA (Fed) Jerome Powell triggered a market crash that reduced the fortunes of America’s richest people by $78 billion, according to Bloomberg.

Elon Musk saw $5.5 billion wiped from his fortune. Jeff Bezos lost $6.8 billion, the most of anyone on the Bloomberg Billionaires Index. The fortunes of Bill Gates and Warren Buffett fell by $2.2 billion and $2.7 billion, respectively, while Sergey Brin’s fell below $100 billion.

Powell used his speech at the annual symposium in Jackson Hole, Wyoming to reiterate that the US central bank will continue to raise interest rates and likely leave them high for some time to rein in inflation. It was seen as reacting to the recent rally in US stocks fueled by speculation that officials would soon reverse course from aggressive monetary tightening.

In this climate of exultation, at Wall Streetthe S&P 500 fell 3.4% on Friday, its worst day since mid-June, while the Nasdaq fell more than 4% and the Dow lost more than 1,000 points.

Few billionaire fortunes have been spared this year. The 500 richest people in the world have lost 1.4 trillion. dollars in the first half of 2022, in the steepest six-month decline on record for the world’s richest people. But U.S. stocks in July posted their strongest monthly gain since November 2020, leading investors to believe the worst of the market slump was over.

Instead, Powell’s speech served as a reminder that valuations of tech giants remain high by historical standards after an unprecedented surge during the coronavirus pandemic, when interest rates were stuck near zero.