Right now, interest rates are squeezing the market.
We're seeing (hopefully) a correction to a more sustainable level of business.
As a response to the pandemic, the US Treasury spent ~$6T more than it collected in taxes: ~$3.2T during the Trump administration and ~$2.8T during the Biden administration,[a] and the US Federal Reserve reduced short-term rates and purchased $5T of treasury and agency bonds, flooding the market with liquidity and lowering long-term interest rates to their lowest level since WWII.[b]
As always and as ever, investors flooded with treasury checks and ultra-cheap money engaged in an orgy of speculation that would make even drunken sailors blush. Crypto is perhaps the most prominent example of it. Trading in meme stonks would be another example. Pokemon Pikachu cards trading for $5M may be the silliest example.
As the speculators threw money around while we all muddled through the pandemic, the world's supply chain system was hit with two massive shocks: (1) the pandemic, which is still limiting the availability of many items (e.g., iPhones made in China), and (2) Russia's war in Ukraine, which triggered a global food and energy crisis (e.g., there isn't enough grain being exported to feed the entire planet).
Both shocks are fueling inflation, prompting the US Treasury to cut spending and the Fed to increase rates and withdraw liquidity from financial markets. Increasing rates and withdrawing liquidity is a very painful way to reduce inflation, but it's the only way that has been shown to work in practice. As money has become less cheap to borrow and less easy to find, businesses and consumers started spending less -- first gradually, then "suddenly."
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