FX.co ★ World's 500 richest people lose billions of dollars

The world's richest people have suffered significant losses amid the market nosedive in the run-up to the Federal Reserve's monetary policy decision. According to the Bloomberg Billionaires Index, the world's 500 richest people lost $1.4 trillion this year, including $206 billion on Monday alone.

Five of the world's richest people lost more than $345 billion this year. They are Tesla's founder and CEO Elon Musk, Amazon's founder Jeff Bezos, CEO of LVMH Bernard Arnault, Microsoft's co-founder Bill Gates and Berkshire Hathaway's Warren Buffett.

The latest sell-off was triggered by market players reassessing their interest rate hike expectations following Friday's hotter than expected inflation data. According to the CME Fed Watch Tool, markets are pricing in a 93.2% probability of a 75 basis point hike on Wednesday and an 89.1% probability of another such hike in July.

According to a report by Capgemini World Wealth, the losses sustained by billionaires this year are in stark contrast to last year's gains. Thanks to soaring markets, the net worth of the world's richest people increased by 8% worldwide and 13% in North America in 2021.

The report noted that people with investable assets of $30 million or more saw their wealth expand by 9.6% in 2021 compared with 2020. In the meantime, those with $1 million to $5 million had the slowest wealth growth at 7.8%.

The majority of the world's richest people lived in the USA, Japan, China, and Germany, Capgemini's report said.

Gains in the stock market helped advance many other sectors in 2021, such as crypto and real estate.

However, soaring inflation and the threat of a potential recession has sent markets tumbling, as the Federal Reserve follows a highly aggressive tightening cycle.