International Monetary Fund warned that there will be more market losses. central banksTry to reduce inflation and increase the use of pandemic stimulative measures.

The optimistic outlook of market players began the year with optimism. They predicted some economic momentum due to an easing Covid-19 restriction, which could boost stocks. However, since Russia’s unprovoked invasion of Ukraine on Feb. 24 that outlook has worsened — with further supply chain shocks and energy price rises.

Tobias Adrian (director for capital and monetary markets at IMF) said Tuesday that there was a possibility of more sell-offs.

He stated that the intention of tightening monetary policy is to reduce economic activity. “I would not be surprised to witness some readjustment in asset values going forward, and this could occur in both corporate bond and sovereign markets.”

It comes as a time when central banks are experiencing high levels of uncertainty.

It U.S. Federal Reserve expects to hike interest rates six more times in 2022, while the European Central Bank confirmed last week it is ending its asset purchase program in the third quarter.

If inflation is high, however, this tightening of the monetary system could accelerate, which would impact market movements. For example, the euro area registered another record level in inflationNumbers last month were at 7.5% for an annual basis. U.S. reported its highest consumer price figures since 1981.

The IMF stated Tuesday that “the risk is increasing that inflation expectations drift away central bank inflation targets,” prompting policymakers to take a more aggressive tightening approach, World Economic Outlook report.

The IMF has released its most recent economic assessment. It stated that high inflation would continue to exist for longer time than expected. The IMF also predicted that the US inflation rate would reach 7.7% this year, and the Euro zone will be at 5.3%.