There was an eye-watering slaughter on Australia’s market yesterday after a woeful day on Wall Street lost over $45 billion in a matter of moments. In the video, economist Shane Oliver discusses what caused it and looks at the foreseeable future of Australia’s economy.

Australia’s share market dropped over $45billion in opening trade on Monday soon after US Federal Reserve chairman Jerome Powell cautioned higher rates were here to stay.

The S&P/ ASX200 opened 1.74 percent weaker as investors on the Australian Securities Exchange reacted severely to chairman Powell's Friday night speech.

Traders and also economists worry more rate rises would spark a recession in the world's greatest economy, with such worries impacting every sector of the share market.

The losses became worse in late morning trade with the S&P/ ASX200 down 2.25 per cent to 6,944.2 points at noon.

The CBA, Australia's major home lender, dropped 2.1 per cent to $96.25 in early afternoon trade.

Australia’s share market's decreases are still moderate compared to Wall Street where the Dow Jones Industrial Average on Friday night ended up 3 per cent lower at 32,283.4 points.

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