The US’s richest 1% reported sharp losses from the US stock market drop, even before major indexes slipped into “bear market” this year.
The group’s total wealth fell by $701 billion in the fourth quarter, the first quarterly decline since early 2020, driven by $1.5 trillion in equity losses that were offset by gains in real estate and other assets, according to Federal Reserve estimates.
It is an abrupt end to the extraordinary two-year streak that has added more than $11 trillion to their collective net worth, thanks to a stock market boom.
The S&P is down 19% since March 31, while the Nasdaq 100 is down an additional 24%. Both indices witnessed a slight decrease of 5% and 9% in the first quarter, respectively.
However, the collective net wealth of this category remained close to $45 trillion, more than the $43.5 trillion held by 90% of the rest of the lower-income population.
The real estate market, a major factor in pandemic-era wealth gains for the rich and middle class alike, has begun to decline, with mortgage rates rising to their highest level since 2008 as the Fed tightened monetary policy to tackle the highest rate of inflation in 40 years.