There were plenty of S&P/ASX 200 Index (ASX: XJO) dividend shares that had a painful month in September.
The ASX 200 as a whole dropped around 7%.
Share markets have been suffering in 2022 as investors get to grips with higher inflation and how central banks are going to handle the situation.
The latest move by the US Federal Reserve was to increase the interest rate by another 0.75%. Considering the US dollar has a global influence, the rapid changes in the US interest rate can have major ramifications.
In Australia, the last move by the Reserve Bank of Australia (RBA) was an increase of 50 basis points. The next move (which is announced next Tuesday) could be another 50 basis point rise.
Higher interest rates are meant to lower asset valuations, in theory. That's because they act like gravity, pulling down on the asset price.
Some ASX 200 dividend share investors may have been hoping that central banks would start to slow down the increases. But that hasn't happened.
US Fed commits to bringing down inflation
As reported by my colleague Bernd Struben, US Fed chair Jerome Powell said:
We have got to get inflation behind us. I wish there were a painless way to do that. There isn't. Higher interest rates, slower growth and a softening labour market are all painful for the public that we serve. But they're not as painful as failing to restore price stability and having to come back and do it down the road again.
That suggests that US interest rates will keep increasing until inflation has been brought under control.
How have ASX 200 dividend shares reacted in September?
ASX 200 bank shares certainly saw their share of red during the month. The Commonwealth Bank of Australia (ASX: CBA) share price fell around 6%, the Westpac Banking Corp (ASX: WBC) share price dropped 3.5% and the National Australia Bank Ltd (ASX: NAB) share price declined 5%. Interestingly, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price managed a rise of around 1%.
Some of the big-yielding resource shares also saw a drop. The BHP Group Ltd (ASX: BHP) share price fell around 4% and the Fortescue Metals Group Limited (ASX: FMG) share price dropped 8%. However, the Rio Tinto Limited (ASX: RIO) share price only dropped 0.2%.
Telecommunications giant Telstra Corporation Ltd (ASX: TLS) saw its share price fall by around 2.5%.
Looking at some other names, the Wesfarmers Ltd (ASX: WES) share price dropped 8%, the Woodside Energy Group Ltd (ASX: WDS) share price fell 7%, the Macquarie Group Ltd (ASX: MQG) share price fell 13% and the Transurban Group (ASX: TCL) share price fell by 8%.
