Tough-talking Fed chief wipes out $83.5 billion from biggest fortunes

The top 500 people on the Bloomberg Billionaires Index lost about US$59 billion on their public holdings. PHOTO: AFP

NEW YORK – Before Federal Reserve chair Jerome Powell took the podium on Wednesday, stocks were approaching their highest levels in six weeks, fuelling a rebound in the fortunes of some of the world’s richest people after a brutal year.

Just as he did in August during an eight-minute speech in Jackson Hole, Wyoming, however, Mr Powell talked tough on inflation, squashing investor hopes of a decisive pivot away from tightening monetary policy and knocking stocks to the lowest in more than a week.

In the span of that 1½ hours from when Mr Powell started speaking to the US stock market close, the top 500 people on the Bloomberg Billionaires Index lost about US$59 billion (S$83.5 billion) on their public holdings.

In total, Tesla chief Elon Musk saw US$9 billion erased from his fortune on Wednesday and Amazon.com founder Jeff Bezos’ wealth declined by US$4.8 billion, while fellow tech billionaires Bill Gates, Larry Ellison, Larry Page, Steve Ballmer and Sergey Brin each lost more than US$2 billion. The collective net worth of this group has tumbled by more than US$300 billion this year, with the United States central bank embarking on its most aggressive interest rate hike campaign in decades.

The S&P 500 Index fell 2.5 per cent on Wednesday, the biggest decline since Oct 7, after climbing by as much as 1 per cent in the minutes after the Fed released its policy statement, which suggested rate increases were entering their final phase.

But Mr Powell insisted that central bank officials “still have some ways” to go before policy was tight enough, and that “it is very premature to be thinking about pausing”. The tech-heavy Nasdaq 100 fell by 3.4 per cent. 

So far in 2022, the world’s 500 richest people, as tracked by the Bloomberg wealth index, have seen US$1.6 trillion, or 20 per cent, shaved off their fortunes. The S&P 500 is 21 per cent lower in the year to date. BLOOMBERG

Join ST's Telegram channel and get the latest breaking news delivered to you.