(Kitco News) The world's wealthiest individuals are feeling the losses as markets collapse ahead of the Federal Reserve announcement scheduled for Wednesday. The Bloomberg Billionaires Index showed that the 500 richest people lost $206 billion on Monday and a total of $1.4 trillion since the start of 2022.
Just looking at the world's five wealthiest individuals, the combined losses amounted to more than $345 billion in 2022. The top five wealthiest people are — SpaceX and Tesla CEO Elon Musk, Amazon founder Jeff Bezos, LVMH boss Bernard Arnault, Microsoft co-founder Bill Gates, and Berkshire Hathaway’s Warren Buffet.
The latest selloff was triggered by markets repricing their interest rate hike expectations in light of hotter-than-expected inflation data published Friday. The CME Fed Watch tool is now projecting a 93.2% chance of a 75 basis point rate hike on Wednesday and an 89.1% chance of another 75 basis point rate hike in July.
The losses reported by billionaires this year are the opposite of what it was like in 2021, when tremendous growth in the equity space contributed 8% to the high-net-worth individuals, including 13% in North America, Bloomberg cited a Capgemini World Wealth report that was published Tuesday.
But the gains among the rich were also concentrated at the very top. The Capgemini report revealed that individuals with investable assets of $30 million or more reported increases of 9.6% in 2021. But individuals with investable assets of $1 million to $5 million saw gains of just 7.8%.
Capgemini's report also showed that most of the world's wealthiest individuals live in the U.S., Japan, China and Germany.
The report noted that the stellar performance of the equity space in 2021 contributed to gains in many other sectors, including cryptocurrencies and real estate.
However, these gains are quickly disappearing, with the number one concern for markets this year being inflation and the potential recessionary environment as the Federal Reserve embraces a very aggressive tightening cycle.
